The Union Ministry of Finance and the Asian Development Bank (ADB) have both dismissed media reports that Finance Minister Nirmala Sitharaman demanded cuts to funding for Pakistan amid rising tensions following the Pahalgam terror attack.
In a statement released on X, the Ministry of Finance clarified that the reports were “incorrect” and “had no basis in fact.” The statement emphasized that no such discussions had taken place regarding the halting of funds to Pakistan.
Earlier reports from various media outlets suggested that Sitharaman had made the request to ADB President Masato Kanda during a meeting on the sidelines of the 58th ADB Annual Meeting in Milan. Some reports also claimed that Sitharaman raised the issue with Italian Finance Minister Giancarlo Giorgetti. These claims fueled speculation that India was actively seeking to reduce financial support to Pakistan amid escalating diplomatic tensions.
The reports surfaced after the Pahalgam terror attack in April 2025, which resulted in the loss of 26 lives. India has accused Pakistan-based terror groups of being behind the attack, citing “cross-border linkages,” a claim Pakistan has denied. In response to the attack, India has pursued diplomatic measures to isolate Pakistan at various international forums.
In the evening, the Asian Development Bank also issued a statement denying the media reports. The ADB confirmed that the bilateral meeting between Sitharaman and President Kanda did not include any discussions on Pakistan. “The Asian Development Bank (ADB) is aware of media reports claiming that issues related to Pakistan were discussed during the bilateral meeting. These media reports are incorrect. Issues related to Pakistan were not discussed during the bilateral meeting,” the statement read.
As of December 31, 2024, ADB had committed a total of $43.4 billion in public sector loans, grants, and technical assistance to Pakistan. The current sovereign portfolio of the ADB in Pakistan includes 53 loans and 3 grants worth $9.13 billion.
Additionally, the Italian Development Cooperation, a significant partner of the United Nations Development Programme (UNDP), has been involved in various initiatives in Pakistan, as stated on the UNDP website.
Both the Union Ministry of Finance and the ADB have worked swiftly to clarify the situation, putting to rest any further speculation regarding the funding issue.