US Adopts Neutral Stance on India-Pak Tensions; India to Challenge Pak IMF Loan, World Bank Rebuffs Pakistan on Indus Treaty
The United States has largely distanced itself from the India-Pakistan conflict, with Vice President J.D. Vance stating it's "fundamentally none of our business" while urging de-escalation. Meanwhile, India plans to oppose Pakistan's $1.3 billion IMF loan request, highlighting its terror record. In a further setback for Pakistan, the World Bank clarified it has no role in mediating the Indus Water Treaty dispute following India's actions regarding the treaty.
Unpacked:
India is opposing Pakistan’s $1.3 billion IMF loan request by highlighting Pakistan’s record on terrorism. India accuses Pakistan of supporting militant groups responsible for attacks in India, such as the recent deadly attack in Kashmir. By raising these concerns, India aims to pressure global institutions to hold Pakistan accountable for its alleged support of terrorism.
Tensions escalated after a terrorist attack in Kashmir on April 22, 2025, killed 28 civilians, mostly Indian tourists. India blamed Pakistan for harboring the attackers, leading to military exchanges, suspension of treaties, and retaliatory measures on both sides. Both countries have issued military threats, and cross-border firing has become a daily occurrence since the attack.
The Indus Water Treaty, signed in 1960, governs water sharing between India and Pakistan over the Indus River system. It is significant because water resources are vital for both countries’ agriculture and livelihoods. India’s suspension of the treaty in response to recent tensions heightens the risk of further conflict, as Pakistan views any alteration to river flows as a severe threat.
Historically, the U.S. has often tried to mediate or de-escalate India-Pakistan tensions. However, Vice President J.D. Vance’s statement that it’s “fundamentally none of our business” signals a shift toward non-involvement, reflecting a more hands-off approach and focusing only on urging both sides to de-escalate without direct intervention.