According to reports, India is likely to actively seek the reinstatement of Pakistan on the Financial Action Task Force (FATF) grey list
In response to the Pahalgam terror attack, India is strategizing dual financial actions against Pakistan to undermine its support for cross-border terrorism.
According to reports, India is likely to actively seek the reinstatement of Pakistan on the Financial Action Task Force (FATF) grey list.
Furthermore, India is anticipated to express concerns regarding the International Monetary Fund’s $7 billion aid package to Pakistan, alleging that the funds are being misappropriated for terrorism-related purposes.
This three-year aid package was finalized in July 2024. Pakistan was placed on the FATF grey list in June 2018 and was removed in October 2022 after committing to combat terror financing, which included jailing, fining, and confiscating assets from individuals associated with terrorist organizations.
If Pakistan is reinstated on the grey list, it will face increased scrutiny of its financial transactions, which could hinder foreign investments and capital inflows.
India is expected to engage with key FATF member nations in the upcoming weeks to rally support for this initiative ahead of the next plenary session, which is the decision-making body of the FATF comprising 40 member states and typically convenes three times a year in February, June, and October.
In addition to downgrading diplomatic relations with Pakistan, India has suspended the Indus Waters Treaty, closed the Integrated Check Post at the Attari-Wagah border, cancelled visa services for Pakistani citizens, and restricted its airspace to Pakistani flights.
The Indian government has also prohibited 16 Pakistani YouTube channels and blocked the Instagram accounts of Pakistani celebrities such as Hania Aamir, Mahira Khan, and Ali Zafar.
In retaliation, Pakistan has implemented a series of reciprocal diplomatic actions, including the suspension of trade, while asserting its right to place the Simla Agreement in ‘abeyance’.
Meanwhile, India also suspended Pakistan PM Shehbaz Sharif’s YouTube amid tensions from Pahalgam attack. This was because, according to India, no more Pakistani propaganda should be seen anymore.
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