India has launched a coordinated diplomatic and financial campaign to press for Pakistan바카라s return to the Financial Action Task Force (FATF) grey list, an intergovernmental watchdog based in Paris that sets global standards to combat money laundering and terror financing.
The push from India centres on a detailed dossier, set to be submitted during the FATF plenary session in June, which compiles financial transactions, intelligence assessments, and international agency inputs. Officials familiar with the contents say the material outlines continued links between Pakistani state institutions and UN-designated terrorist groups, contravening the very commitments that led to Pakistan바카라s delisting in October 2022.
Citing both structural failures and wilful non-compliance, the dossier reportedly documents how Pakistan has violated key FATF parameters related to anti-money laundering (AML) and counter-terrorism financing (CTF). According to The Indian Express, the submission will argue that despite formal commitments to financial transparency, Pakistan has permitted continued financial flows to groups such as Lashkar-e-Taiba and Jaish-e-Mohammed.
In parallel, India is urging financial institutions like the International Monetary Fund (IMF) and World Bank to reassess their economic support to Islamabad. The Indian government has presented data suggesting that aid intended for economic reform may have been diverted to military buildup and terror financing. The Economic Times reports that India바카라s analysis shows a 20% surge in Pakistan바카라s arms imports during periods of active IMF funding between 1980 and 2023.
What is the FATF and the Grey List?
The Financial Action Task Force (FATF) is an international body that sets global standards to combat money laundering, terror financing, and threats to the international financial system. Established in 1989 by the G7: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, it operates today with 39 member jurisdictions and over 200 affiliated countries under its recommendations.
The FATF maintains two public compliance lists, the Grey List and the Black List.
The Grey List, officially called 바카라Jurisdictions under Increased Monitoring,바카라 flags countries with strategic deficiencies but a commitment to reform against money laundering and terrorism. Countries presently on this list include Lebanon, Haiti, South Sudan, South Africa and Monaco, among others.
The Black List, reserved for high-risk jurisdictions with severe deficiencies and no credible plans for improvement. There are only three countries on this list: Myanmar, the Democratic People's Republic of Korea and Iran.
Placement on the grey list can significantly impact a country바카라s economy, prompting increased scrutiny of financial transactions, reduced investor confidence, and greater difficulty in securing international loans and aid.
Why Was Pakistan Previously Grey-Listed?
Pakistan was first grey-listed in 2008 and again in 2012 for allegedly failing to curtail terror financing, especially in relation to groups like Lashkar-e-Taiba and Jaish-e-Mohammed. It remained under watch until 2015 and was grey-listed again in 2018 following increased international pressure after the Pulwama terror attack.
Over the next four years, FATF issued a series of 34 action points requiring Islamabad to prosecute UN-designated terrorists, strengthen financial oversight, and reform domestic laws.
In October 2022, member countries of the FATF, including India, voted unanimously in favour of removing Pakistan from the grey list.
Arindam Bagchi, a Ministry of External Affairs spokesperson, said, 바카라It is in global interest that the world remains clear that Pakistan must continue to take credible, verifiable, irreversible and sustained action against terrorism and terrorist financing emanating from territories under its control.바카라
The national sentiment, however, has shifted since the April 22 terror attack in Pahalgam, earlier this year.
Why Does India Want Pakistan Re-listed?
India contends that Pakistan has not sustained its commitments post-2022 removal and continues to support or tolerate activities of groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), responsible for attacks such as the 26/11 Mumbai attacks and the Pulwama bombing.
Indian officials claim to be preparing a comprehensive dossier for the upcoming FATF plenary in June 2025, which reportedly includes: Financial intelligence tracing public funds and foreign aid diverted to militant proxies, budget analysis highlighting Pakistan's increased defence spending amid economic crises, data from international allies, indicating misuse of economic aid for military expansion.
Post Pahalgam Diplomacy
India바카라s pressure campaign for global accountability is not limited to FATF corridors. After the Pahalgam terror attack, officials quickly pinned blame on Pakistan, which resulted in a 4-day cross-border shelling and ended in a ceasefire. While most international bodies and government officials condemned violence and praised peace agreements between India and Pakistan, most did not directly blame Pakistan for the attacks in May.
India has since organised meetings with global stakeholders in Europe, the Gulf, and North America. The objective is twofold: to isolate Pakistan diplomatically and to build consensus around the need for enhanced scrutiny of its financial and military practices.
In Bahrain, AIMIM MP Asaduddin Owaisi told officials that Pakistan is a 바카라failed state바카라 whose financial systems are routinely exploited by extremist actors. The Financial Express quotes Owaisi as urging Bahraini leaders to support India바카라s FATF re-listing proposal. In Washington, Congress MP Shashi Tharoor referred to Pakistan as a 바카라revisionist power바카라 during discussions with US policy analysts, warning that future aggression across the Line of Control would draw direct and escalated responses.
Former External Affairs Minister Salman Khurshid, speaking in Seoul, pointed to the relative calm in Jammu and Kashmir following the abrogation of Article 370. He argued that this peace is threatened by cross-border provocations aimed at undermining India바카라s domestic narrative of normalcy. Shiv Sena MP Shrikant Shinde, meanwhile, met leaders from the UAE and the Democratic Republic of Congo, both of whom reportedly expressed support for India바카라s call to counter state-backed terrorism.
What Are the Consequences If Pakistan Is Grey-Listed Again?
Grey-listing has historically resulted in significant economic losses for Pakistan. A study by Islamabad-based think tank Tabadlab estimated that grey-listing from 2008 to 2019 led to cumulative GDP losses of approximately $38 billion, driven by reductions in consumption, exports, and foreign direct investment. Additionally, Pakistan's banking system would face tougher scrutiny, making international transactions slower and costlier.
A return to the grey list could damage Pakistan's international credibility and strain its bilateral relations, especially at a moment when Pakistan is navigating a precarious IMF agreement.
In May 2025, the International Monetary Fund approved a fresh $1 billion disbursement to Islamabad. While technically a mark of progress, the payout was tied to a new slate of structural reforms, among them, stricter legislative oversight of the national budget, sector-wide tax rationalisation, and energy tariff corrections aimed at closing fiscal deficits. The IMF바카라s own communications have flagged Pakistan바카라s geopolitical fragility, warning that regional instability, particularly tensions with India, could derail the reform trajectory and complicate future funding.
While Indian officials frame the FATF push as a corrective, moral, and rooted in financial integrity, it also serves geopolitical objectives by adding pressure on a neighbouring state already under economic strain. The extent to which FATF decisions are driven by technical compliance versus political consensus remains a recurring point of debate among observers, particularly in a year marked by heightened regional volatility.
