New Delhi: In a firm response to Pakistan’s alleged support for cross-border terrorism, India has launched two significant financial offensives aimed at tightening economic pressure on its neighbour.
Sources close to the matter have revealed that India is set to renew efforts to have Pakistan re-added to the Financial Action Task Force (FATF) grey list.
A move to reinstate Pakistan on the list would subject the country to increased international scrutiny, risking foreign investments and restricting its access to global capital markets. Pakistan was previously placed on the FATF grey list in June 2018 and remained there until October 2022.
In addition to this, India plans to challenge the $7 billion IMF assistance package granted to Pakistan. Indian officials are reportedly concerned that the funds could be misappropriated for activities linked to terrorism, intensifying the strain in the already volatile relationship between the two nations.
The renewed financial strategies come after the tragic attack on April 22, 2025, in Kashmir, which India attributes to The Resistance Front (TRF), a proxy of the Pakistan-based terrorist group Lashkar-e-Taiba (LeT). The brutal assault on Hindu pilgrims resulted in 26 deaths, with victims being forced to strip and recite Islamic verses before being executed in front of their families. This attack has prompted widespread outrage in India, further escalating tensions between the two countries.
In immediate retaliation, India suspended the Indus Waters Treaty and closed the Attari-Wagah border crossing, which is a vital trade route between India and Pakistan. Additionally, Indian authorities expelled Pakistani diplomats and gave Pakistani visa holders 48 hours to leave the country.
In a bold response, Indian Prime Minister Narendra Modi has authorized the Indian armed forces to independently decide on the “mode, targets, and timing” of the country’s retaliation. This follows a pattern from previous conflicts, notably the 2019 Pulwama attack, when India conducted air strikes on Jaish-e-Mohammed terror camps in Balakot, Pakistan, in response to a deadly assault.
The evolving situation has heightened fears that the ongoing crisis could spiral into further military confrontation between the nuclear-armed neighbors.
