New Delhi: India is preparing to press the Financial Action Task Force (FATF) to place Pakistan back on its “grey list” and will oppose upcoming financial assistance to Islamabad from the World Bank, according to a senior government official in New Delhi.
These moves are part of a broader response from India following a series of militant attacks it alleges were backed by Pakistan. The most recent incident, in which 26 Hindu tourists were killed in the Kashmir valley, has prompted New Delhi to escalate diplomatic and financial pressure on its western neighbor.
The top government source stated, “India would not miss any opportunity in opposing Pakistan and the next one is funding by World Bank, and we will raise our protest there too.”
Pakistan’s finance ministry has yet to issue a comment in response. Islamabad has categorically denied involvement in the Kashmir attack and has condemned India’s decision to suspend the Indus Waters Treaty, calling it “an act of war.”
Tensions between the two nuclear-armed nations spiked earlier this year, culminating in the most intense military confrontation in nearly 30 years. The conflict was halted with a ceasefire agreement on May 10.
Pakistan was removed from the FATF’s grey list in 2022, a significant move that improved its global financial standing and helped unlock much-needed funding for its fragile economy. Being grey-listed implies enhanced monitoring of a country’s financial practices until identified weaknesses are resolved.
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However, the Indian official claimed that Pakistan had not fully met the conditions for its removal from the list and should be re-included due to ongoing concerns over terrorist financing.
The source also said that India has communicated to the International Monetary Fund (IMF) that Pakistan’s arms acquisitions increase noticeably following each IMF loan disbursement. Reuters has not independently verified these allegations.
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Neither the FATF, the World Bank, nor the IMF responded to requests for comment.
Pakistan recently secured a $7 billion bailout from the IMF and an additional $1.4 billion under a climate resilience fund this month. On Thursday, IMF director Julie Kozack stated in a Washington press conference that Pakistan had fulfilled all targets and advanced in its reform agenda, which led to the board’s approval of the programme.
Indian Prime Minister Narendra Modi issued a stern warning on Thursday, saying that Pakistan, along with its army and economy, would “have to pay a heavy price for every terrorist attack.”
