India Ramps Up Pressure: Calls on FATF, World Bank, and IMF to Take Sides in Pakistan Standoff

New Delhi flexes diplomatic muscle—urging global financial heavyweights to pick a side in the escalating tensions. No room for neutrality when geopolitics meets balance sheets.

Behind the scenes: India’s push could force institutions to abandon their usual ’risk assessment’ theater and actually act. Will they freeze assets or just issue another toothless report?

Closing thought: Nothing unites regulators like a chance to meddle in someone else’s economy—bonus points if they can charge ’oversight fees’ for the privilege.

India’s actions to drag Pakistan back to the “grey list”

Pakistan was taken off the FATF grey list in 2022. This gave it a clean bill of health when it comes to funding terrorism and improved its image with lenders, which was very important for Pakistan’s economy, which was in a crisis.

When a country is put on the FATF’s “grey list,” it is closely watched until it fixes problems in its financial system. A person in the Indian government said that Pakistan had not met the requirements to be taken off the “grey list,” so it should be put back on it.

According to reports, India also told the IMF that Pakistan bought more weapons every time it got a loan from the IMF. Last year, the IMF gave Pakistan a $7 billion bailout program. This month, the IMF gave Pakistan another $1.4 billion through a climate resiliency fund.

China and the US refuse to pick a side

The UN asked the neighbors with nuclear weapons to be very careful with their war actions. The US, China, and UAE also asked for things to calm down. In fact, earlier in the month, US Vice President JD Vance said that Washington hoped Pakistan WOULD cooperate with India to hunt down Pakistan-based assailants.

However, China has had disagreements with both Pakistan and India in the past about other parts of Kashmir. It made a deal with Pakistan in 1963 to set the border between the two countries. However, India doesn’t believe that deal is still true and is still fighting China’s claims to part of eastern Kashmir.

China now has the most money spent in Pakistan. Since 2015, $62 billion has been put into the China-Pakistan Economic Corridor. However, in the past few months, Beijing has been trying to improve its relationship with New Delhi. 

On the other hand, the US has been building its relationship with the country for years to counter China’s influence in the area. 

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