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Target where it hurts: India wants Pakistan back on FATF ‘grey list’; to oppose World Bank loans

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Target where it hurts: India wants Pakistan back on FATF ‘grey list’; to oppose World Bank loans
Pakistan’s removal from the FATF grey list in 2022 had enhanced its standing with financial institutions – a crucial factor for its struggling economy. (AI image)

India is looking to block Pakistan’s source of funds in its fight against the neighbouring country’s state-sponsored terrorism. After opposing the IMF’s bailout package for Pakistan, India is now planning to contest the upcoming World Bank loans to Pakistan as well.Additionally, India plans to urge the Financial Action Task Force (FATF), an international financial crime monitoring body, to reinstate Pakistan on its “grey list”, according to a senior government official quoted by Reiters,Pakistan’s removal from the FATF grey list in 2022 had enhanced its standing with financial institutions – a crucial factor for its struggling economy.A few weeks ago, the IMF had granted the bailout package to Pakistan, citing its improved economic conditions. India had abstained from voting at the International Monetary Fund’s Executive Board meeting, expressing serious concerns about IMF bailout packages for Pakistan.Also Read | ‘Met targets’: IMF defends $1bn bailout package to Pakistan despite India’s pushbackIndia had highlighted Pakistan’s history as a long-term IMF borrower with poor compliance regarding programme conditions. The substantial financial support has led to Pakistan amassing significant debt, effectively making it a ‘too big to fail debtor’ for the IMF, India said.India had raised doubts about the efficacy of IMF’s support to Pakistan, citing its poor track record. India also raised concerns about the possible use of debt financing resources to support cross-border terrorism through state mechanisms.IMF has justified its bailout package support to Pakistan saying that the country had met all essential criteria to qualify for its most recent loan disbursement.Meanwhile, Prime Minister Narendra Modi has delivered a resolute message following the India-Pakistan ceasefire.. “India’s stand is very clear… Terror and talks cannot go together… Terror and trade cannot go together…. Water and blood cannot flow together,” PM Modi has said.Also Read | All trade routes closed for Pakistan: India scrutinising imports from UAE, Iran & other Gulf countries to spot Pakistani goodsFollowing the Pahalgam terror attack and before Operation Sindoor, India implemented various economic and strategic sanctions against Pakistan, designed to impact its already weakened economy.These measures, ranging from the suspension of the Indus Waters Treaty to comprehensive restrictions on direct and indirect trade relations, continue to remain active.





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