Finance Ministry, ADB deny reports of Nirmala Sitharaman demanding fund cuts to Pakistan

The Union Ministry of Finance and Asian Development Bank have both denied media reports claiming that Finance Minister Nirmala Sitharaman has demanded fund cuts to Pakistan amid rising tensions with India following the Pahalgam terror attack.

“It is clarified this news is incorrect and has no basis in fact,” the ministry said in a statement on X.

Earlier, several media houses had reported that Sitharaman had demaded from Asian Development Bank President Masato Kanda the halting of funds to Pakistan. Reports also suggested that she made the same request to her Italian counterpart Giancarlo Giorgetti.

The reports suggested that Sitharaman made the requests on the sidelines of the 58th ADB Annual Meeting in Italian city of Milan.

They came amid escalating tensions between India and Pakistan as New Delhi seeks to corner the neighbouring state diplomatically and at various international forums following the dastardly terror attack in Pahalgam last month, which killed 26 tourists.

India has cited “cross-border linkages” behind the attack. Pakistan has denied any involvement.

ADB refutes claim

In a statement issued later in the evening, the Asian Development Bank said that the reports were incorrect and India Pakistan issues were not discussed in the meeting with Sitharaman.

“The Asian Development Bank (ADB) is aware of media reports claiming that issues related to Pakistan were discussed during the bilateral meeting between ADB President Masato Kanda and Indian Finance Minister Nirmala Sitharaman on the sidelines of the 58th ADB Annual Meeting in Milan, Italy,” it said.

“These media reports are incorrect. Issues related to Pakistan were not discussed during the bilateral meeting”.

Financial aids to Pakistan

As of December 31, 2024, ADB has committed 764 public sector loans, grants, and technical assistance totalling $43.4 billion to Pakistan. ADB's current sovereign portfolio in Pakistan includes 53 loans and 3 grants worth $9.13 billion.

As per United Nations Development Programme website, the Italian Development Cooperation is an essential UNDP partner in Pakistan and across the world. "Some of Italy's major initiatives and contributions are in Pakistan," UNDP website read.

Nirmala Sitharaman in Milan

Nirmala Sitharaman is in Milan to attend the 58th ADB Annual Meeting, which is going on from May 4 to may 7.

During the bilateral meeting with ADB president, Sitharaman reiterated that India focuses on private sector-led economic growth and has been consistently creating a conducive policy and regulatory ecosystem through bold initiatives such as the Insolvency and Bankruptcy Code, and GST implementation, Production-Linked Incentives, among others, for greater Ease of Doing Business, the finance ministry later said in a post on X.

Sitharaman emphasised that India offers opportunities for ADB to pilot new, innovative financing products and models, it said.

Kanda expressed ADB's full support to India's development priorities, guided by Prime Minister Narendra Modi's vision of Viksit Bharat 2047, it said.