India to urge FATF to ‘grey list’ Pak again, oppose World Bank funding
New Delhi: India is set to present a detailed dossier to the Financial Action Task Force (FATF) calling for Pakistan’s return to the global watchdog’s “grey list,” while also opposing a proposed $20 billion World Bank lending programme to Islamabad, citing concerns over terror financing and the alleged diversion of international funds for arms procurement.
“India will submit a dossier to the FATF on the omissions and commissions by Pakistan with respect to FATF anti-money laundering and terror financing norms. We will be taking it up for grey listing of Pakistan,” a government official said. The dossier is expected to highlight recent incidents, including the April 22 attack in Pahalgam, Jammu and Kashmir, in which 26 people were killed by militants India claims were trained across the border.
Indian officials also plan to object to the World Bank’s upcoming review of its long-term funding to Pakistan under the Country Partnership Framework. The 10-year plan, set to begin in 2026, targets sectors such as clean energy and climate resilience. “We will oppose the upcoming World Bank funding to Pakistan,” the official added, alleging that previous financial assistance has been misused.
The FATF’s Asia Pacific Group is scheduled to meet on August 25, and India is expected to bring the matter to the table at that time. The FATF plenary and working group meeting will follow on October 20.
India has long maintained that Pakistan offers safe haven to internationally designated terrorists. The recent presence of senior Pakistani military personnel at the funerals of militants killed in Indian military operations on May 7 will also be included as part of the evidence submitted. Pakistan has been on and off the FATF grey list since 2008, with the most recent removal occurring in October 2022 after commitments to improve its anti-money laundering and counter-terror financing systems. However, India argues that Islamabad has not followed through on these pledges in substance. The grey list currently includes 25 countries under increased monitoring, requiring them to resolve strategic deficiencies in their regimes to combat money laundering and terror financing. India’s objections are not limited to FATF. Earlier this month, New Delhi raised similar concerns with the International Monetary Fund (IMF) over its $2.3 billion assistance package to Pakistan. Indian officials say they provided IMF board members with documentation showing increased defense spending by Pakistan during periods of financial support from international institutions. “India is not averse to any country receiving money for development purposes,” the official said. “But the IMF funding was not the right thing to do at a time when there were border tensions between India and Pakistan and a situation of war.”
Data cited by Indian authorities shows Pakistan spends around 18 per cent of its national budget on defence, significantly higher than the average for other conflict-affected nations. Additionally, arms imports reportedly surged by over 20 per cent during years of IMF disbursements compared to other periods.
