New Delhi: In the wake of the April 22 terror attack in Pahalgam, India is preparing to escalate diplomatic and financial pressure on Pakistan by seeking its re-entry into the Financial Action Task Force (FATF )’s ‘grey list’, a move aimed at restricting the financial channels that allegedly enable cross-border terrorism.
Government officials believe this measure could once again isolate Pakistan economically and deter the flow of illicit funds into India, particularly into Jammu & Kashmir.
India is considering two major financial countermeasures against Pakistan. The first among them is lobbying for Pakistan’s return to the FATF ‘grey list’. Officials familiar with the plan told The Indian Express that the move is part of a broader strategy to block the financial pipelines allegedly aiding terror groups operating across the border.
“There has been a discussion on the steps that could be taken on the financial front. Demanding a ‘grey list’ for Pakistan at the FATF is on the table. But there is a nomination process in FATF and members can ask for taking up the matter, that can be approved by the Plenary,” an official aware of the developments was quoted as saying by the Indian Express.
Pakistan was earlier greylisted from June 2018 to October 2022. Indian authorities argued that the previous listing helped reduce illicit fund transfers into India.
The second step India may take is opposing a 1.3 billion dollar IMF loan to Pakistan at a board meeting scheduled for May 9. This loan, tied to Pakistan’s climate resilience program, will be assessed alongside its progress on a separate 7 billion dollar bailout. New Delhi might use the platform to highlight Pakistan’s alleged support for terrorism.
“There is a view that support to terror by the neighbouring nation be flagged at the board meeting when the loan is taken up,” a source familiar with the development was quoted as saying by The Economic Times.
