India to push FATF to re-include Pakistan in its ‘grey list’

24 May 2025 2 mins Download PDF

India will take up terror funding charges against Pakistan to make a case for putting it back in the “grey list” of Financial Action Task Force (FATF), the global money laundering and terror financing watchdog, government sources said

India is, specifically, planning to flag Pakistan’s non-compliance of the legal provisions that it had committed itself to when it was taken off the grey list in 2022. Pakistan had been included in the grey list in 2018, and had been removed from it in 2022.

Being in this list adversely impacts FDI and capital flows as businesses have to undertake enhanced due diligence. Government officials had earlier said this had helped curtail illicit fund flows from Pakistan into India, especially into J&K

At present, FATF has put 25 countries including Kenya, Monaco, Nepal, South Africa, Vietnam in the grey list and three countries — North Korea, Iran and Myanmar — in the black list

To initiate a nomination process demanding a grey list status for Pakistan, India will require the support of other FATF member countries. The plenary is the decision-making body of the FATF, which meets three times a year, usually in February, June and October. The FATF has 40 members, and over 200 jurisdictions have committed to the FATF recommendations through the FATF-Style Regional Bodies.

Separately, India will raise objections to a review of World Bank funding to Pakistan which is also slated for June. In January this year, World Bank and Pakistan launched a new Pakistan Country Partnership Framework (CPF) for FY2026-35, outlining areas of strategic collaboration between the Bank and Pakistan for the coming decade including indicative lending of $20 billion between FY26-35