India Cites Gandapur’s Remarks to Urge Pakistan’s FATF Grey Listing

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India has cited recent remarks by Khyber Pakhtunkhwa (KP) Chief Minister Ali Amin Gandapur in a bid to persuade the Financial Action Task Force (FATF) to place Pakistan back on its grey list, arguing they reflect institutional shortcomings in curbing terrorism.

On July 31, 2025, the Indian government submitted Gandapur’s public statement—“We arrest the Taliban, but our own institutions get them released, claiming they are their people”—as part of its outreach to FATF member states, according to Geo News. Indian officials argue that the comment demonstrates internal contradictions in Pakistan’s counter-terrorism efforts. This comes amid ongoing diplomatic tensions between the two countries.

According to The Express Tribune, India contends that the remarks suggest institutional tolerance of proscribed groups and undermine the commitments Pakistan made when it was removed from the FATF grey list in October 2022. That removal followed the completion of 34 action items related to anti-money laundering and counter-terrorism financing reforms, as documented by FATF.

India’s submission, detailed in the Daily Times, characterizes Gandapur’s statement as a “charge sheet” pointing to compliance gaps. Business Today reported in May 2025 that Indian officials also raised concerns regarding Pakistan’s $7 billion International Monetary Fund (IMF) package, questioning the monitoring of fund disbursement. Pakistani officials have rejected these claims in previous briefings.

Pakistan’s Foreign Office has not yet publicly commented on the latest development. However, state media, including Arab News, reported in June 2025 that FATF had previously rejected similar attempts by India to seek enhanced monitoring for Pakistan.

India’s diplomatic efforts are reportedly aimed at building support ahead of the FATF’s next plenary session in October 2025, as noted by The New Indian Express. Pakistan was previously on the FATF grey list from 2018 to 2022 and has maintained that it continues to meet all current obligations.

Pakistan’s economy, valued at $350 billion and reliant on $30 billion in annual remittances, could face adverse impacts if it were to be grey-listed again. Restrictions on foreign investment and financial transactions could follow such a move. As of now, FATF has not announced any formal action.

The matter remains under international review, with diplomatic discussions ongoing among FATF member states.