India’s firm resolve to seek the re-listing of Pakistan in the Financial Action Task Force (FATF) grey list signals a strategic escalation in its diplomatic offensive against cross-border terrorism. In the wake of the deadly Pahalgam terror attack, New Delhi has made it abundantly clear that it will not allow Pakistan to slip through international scrutiny again. The decision to lobby the FATF to revert Pakistan to the grey list underscores India’s message: time for leniency is over, and Pakistan must be held accountable for its duplicity and continued support of terrorism. Between 2018 and 2022, Pakistan was placed on FATF’s grey list for failing to combat money laundering and terrorist financing effectively. The global watchdog identified numerous strategic deficiencies in Pakistan’s financial and regulatory regimes, particularly concerning its inability or unwillingness to act against UN-designated terror groups such as LeT and JeM. Despite being on the grey list, Pakistan indulged in superficial compliance-enacting cosmetic reforms while shielding the deeper infrastructure of terror.
International observers at the time were hopeful that pressure from FATF, along with Pakistan’s pressing need for international financial aid, would prompt genuine reform. However, Pakistan managed to manipulate by showcasing selective action and symbolic arrests, many of which were later overturned or quietly reversed. High-profile terrorists were put under “house arrest,” only to be released once global attention shifted. This pattern of tactical appeasement allowed Pakistan to be removed from the grey list. Pakistan has not dismantled the infrastructure of terror-it has merely made it more opaque. India has consistently produced evidence of continued financial flows to terror outfits through charitable fronts, informal hawala networks, and international donations diverted through shell NGOs.
Now, with a visible surge in infiltration attempts along the LoC, India is pressing its case harder than ever. The pattern is familiar: attacks are orchestrated by Pakistan-based operatives, and official agencies in Islamabad either look the other way or provide covert support. Despite repeated assurances to the global community, Pakistan continues to treat terrorism as a strategic tool rather than a threat to global peace. India has already taken preliminary steps to choke off international funding to Pakistan by opposing a recent IMF tranche disbursal. It is actively highlighting how Pakistan has diverted international aid-meant for social and economic development-to arm and train non-state actors. By moving in FATF, New Delhi is ensuring that pressure is maintained from multilateral forums and that Pakistan does not regain the financial breathing space it lost during its grey list period.
India is expected to present “clinching evidence” at the FATF plenary in June, detailing terror financing routes, safe havens, and the involvement of state agencies in promoting extremist ideologies. These dossiers are expected to build an unassailable case against Pakistan, one that could force even reluctant members of the FATF to acknowledge the threat posed by a nation that has perfected the art of duality-posing as a victim of terrorism while incubating the very actors that cause global instability.
There is now a growing consensus that Pakistan’s behaviour will not change unless it is made to pay a significant price. The only sustainable path forward for Islamabad lies in the complete dismantling of terror infrastructure, the prosecution of financiers and handlers of extremist groups, and visible cooperation with India in preventing cross-border terrorism. India is not merely reacting to provocations but leading a proactive international campaign. The message is clear: words and token gestures will no longer suffice. What is required is verifiable, irreversible, and sustained action. Pakistan finds itself in a familiar yet far more precarious situation. The regional environment is less forgiving, global patience has worn thin, and India, with renewed resolve and irrefutable evidence, is spearheading a comprehensive effort to bring Islamabad’s duplicity to light. Unless Pakistan chooses to fundamentally change course, the coming months may well be a repeat of its grey list ordeal-this time with far more damaging consequences.
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