Ahead of a crucial International Monetary Fund (IMF) meeting, India is making a coordinated push to have Pakistan re-added to the Financial Action Task Force (FATF) grey list, which could severely limit Pakistan’s access to global financial assistance, including that from the IMF. The Indian government is preparing a dossier with actionable evidence to support its claims, aiming to get support from FATF member nations to isolate Pakistan financially.
India Seeks to Isolate Pakistan Financially
The Indian government is focusing on gathering maximum support from FATF’s 40 member-countries to re-nominate Pakistan as a state supporting global terrorism. In a bid to strengthen its case, India is working closely with various national security bodies, including the National Security Council Secretariat and the Enforcement Directorate. The government aims to present solid evidence of Pakistan’s failure to curb terror financing and money laundering, arguing that Pakistan has backslid in its commitments after being removed from the FATF’s grey list in October 2022.
Behind closed doors, India is also invoking the FATF’s International Cooperation Review Group (ICRG), which monitors the actions of countries that have made commitments to improve their anti-money laundering and counter-terrorism financing measures. India is pushing to highlight that Pakistan has not fully implemented its reform commitments and is still home to several terror groups, which directly impact India’s security, particularly in Jammu and Kashmir.
Global Support for Re-Listing Pakistan Remains Crucial
India’s renewed push comes at a critical time, following a terror attack on civilians in Pahalgam, Jammu & Kashmir. The IMF board, which is set to meet soon, is expected to review financial assistance for Pakistan. If Pakistan is placed back on the FATF grey list, its ability to negotiate for international aid could be significantly hampered, with dire consequences for its economy.
The grey list serves as a warning to countries with inadequate anti-money laundering and counter-terrorism financing regimes. Countries on the list face increased scrutiny and the risk of severe economic consequences if they fail to make the necessary reforms. Pakistan’s previous inclusion in the grey list between 2018 and 2022 resulted in international pressure, forcing the country to take some action against terror groups. However, sources suggest that Pakistan’s progress has since stagnated, with insufficient enforcement of sanctions and weak prosecutions of terror financiers.
India’s push for Pakistan’s re-listing is seen as part of a broader strategy to pressure Islamabad into concrete, verifiable actions against terrorism and to limit the financial support that sustains these networks. The upcoming decisions by the FATF and IMF will play a crucial role in shaping Pakistan’s financial future.
