In a big diplomatic and counterterrorism pull by the Financial Action Task Force (FATF), Pakistan is set to be on its grey list after the deadly terror attack in Pahalgam of Jammu and Kashmir. Calling the attack one that “cannot occur without strong terror financial networks”, FATF’s warning has only served to vindicate India’s consistent stand that Pakistan remains a safe haven for terror groups and their financiers.
This is an unprecedented support by FATF—an intergovernmental body that works to fight terror financing and money laundering—that has rattled the diplomatic community. It has buttressed India’s global narrative and laid bare Pakistan’s inability to dismantle the terror ecosystem flourishing in its backyard.
What Happened in Pahalgam?
On June 15, 2025, terrorists attacked a bus in the Pahalgam area of Jammu and Kashmir. The vehicle carrying pilgrims was targeted in heavy firing and explosives. The attack under Operation Sindoor killed 9 pilgrims and left 30 more seriously injured.
The bus, without a security escort and with only minimal protective measures, was an easy target. According to eyewitnesses, the bus went out of control and fell into a gorge after being fired at several times and having a grenade thrown at it.
India’s Response: Accusing the Source
The Indian government acted fast, with intelligence agencies pointing fingers at Pakistan-backed terror outfits, including Lashkar-e-Taiba and Jaish-e-Mohammed. These groups have a track record of carrying out such attacks in Jammu and Kashmir, often with logistics and financial support that India alleges comes from across the border.
India’s Ministry of External Affairs released a statement that underlined the involvement of international terror funding networks in the Pahalgam attack. The country also called for “firm and decisive” global action against Pakistan for its continued support of terrorism.
FATF’s Scathing Criticism
Soon after the appeal made by India, the FATF came down heavily on Pakistan for allowing its territory to be used to launch the Pulwama attack. FATF members reached consensus in an internal discussion leaked to media, subsequently confirmed by diplomats, that “an attack of such scale and coordination cannot be executed without money,” according to people familiar with the discussions.
The FATF chairperson also reportedly cautioned that Pakistan would be subjected to intense inspection again, with even the possibility of returning to the grey list—a listing that had previously crippled Pakistan’s international financial activities and trade opportunities.
It is not the first time that Pakistan has come under the FATF’s scrutiny. The country was only taken off the grey list in October 2022 after it met some conditions on bolstering its efforts against terror funding. But there are signs that could be about to change.
Why FATF’s Reaction Matters
The FATF is an influential global body comprising 39 members, including powerful countries like the U.S., India, and the European Union. Its blacklisting or gray-listing can severely affect a country’s economy, cutting off access to international loans, foreign investments, and even global trade routes.
FATF’s comments come at a time when India is aggressively pushing for global isolation of countries that harbor and finance terror. With its endorsement, FATF has added significant weight to India’s voice on the global stage.
International Support for India Grows
After FATF’s statement, several countries came forward to support India’s position. France, Germany, and the U.S. have expressed concern over the resurgence of terror financing routes in South Asia. In particular, the U.S. State Department issued a press release stating:
“We condemn the terrorist attack in Pahalgam and support India’s fight against terrorism. The recurrence of such events underscores the need for enhanced international cooperation on dismantling terror financing.”
Pakistan’s Denial and Diplomatic Pushback
Pakistan, however, has dismissed the allegations as “baseless and politically motivated.” The country’s Foreign Office released a statement rejecting FATF’s claims and accused India of running a smear campaign to tarnish Pakistan’s image.
Pakistani officials claim that they have met all FATF compliance measures and have taken robust steps to dismantle financing channels linked to terror groups.
However, intelligence reports from both Indian and international agencies suggest otherwise. Satellite imagery, intercepted communications, and confessions from captured militants have repeatedly shown a clear link between Pakistan-based operatives and attacks within Indian territory.
Internal Reactions Within India
Within India, political parties and security experts have applauded the global support and FATF’s remarks. Home Minister Amit Shah, while addressing media, stated:
“The world is finally acknowledging what India has been saying for decades. Terrorism cannot survive without funding. And that funding comes from across the border. We will not rest until those responsible are brought to justice.”
Social media platforms and news outlets have also seen a surge in patriotic sentiment, with citizens demanding stricter military and diplomatic action.
Renewed Call for Global Sanctions
India is now using this as an opportunity to beat the drums for international sanctions on both individuals and organizations situated in these countries who aid and abet these terror operations. It is also exhorting the United Nations Security Council to notice the fact that Pakistan has made no real effort to check terror funding.
India is also likely to place fresh evidence at the UN and G20 counterterrorism meetings.
A Pattern Repeats
It’s not the first time Pakistan’s fingerprints on terror had been revealed, though. From the 2008 26/11 attacks in Mumbai to the Pulwama bombing last year, there is a steady stream of evidence leading back to Pakistani soil as being the crucible for jihadist terror.
Pakistan, under growing international pressure, has repeatedly failed to take these networks apart, as often as not through political and military complicity.
Conclusion: A Tipping Point?
The Pahalgam terror attack could mark a tipping point in the global approach towards Pakistan’s double-dealing on terrorism. With FATF’s latest remarks and growing international consensus, the road ahead looks increasingly difficult for Islamabad.
If Pakistan fails to act decisively against terror financing this time, it risks global isolation, severe economic sanctions, and a permanent place on international blacklists.
For India, the attack is a grim reminder of the threats it continues to face. But the diplomatic victory it has scored in the wake of FATF’s support might just lay the foundation for a global coalition against state-sponsored terrorism.
Source: हादसे की पृष्ठभूमि , Aaj Tak Report on Pahalgam Attack and FATF Statement
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