New Delhi, May 23 (PTI) India will highlight Pakistan's persistent support for terrorism and its funnelling of multilateral funds for arms procurement to build a strong case for reinstating Islamabad on the global money laundering and terror financing watchdog's 'grey list', and block funding from the World Bank.

On April 22, Pakistan-trained terrorists killed 26 people in Pahalgam, Kashmir. India has consistently held that Pakistan has given safe haven to designated terrorists and the same was evident when senior military officials were present at the funeral of the terrorists killed in Indian military attacks of May 7.

The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog and sets international standards that aim to prevent these illegal activities.

"India will submit a dossier to the FATF on the omissions and commissions by Pakistan with respect to FATF anti-money laundering and terror financing norms. We will be taking it up (with the FATF) for grey listing of Pakistan," a government source said.

The next meeting of the Asia Pacific Group (APG) of FATF is scheduled for August 25, during which India is likely to present its views to the global watchdog. The next FATF plenary and working group meeting is scheduled for October 20.

Currently, there are 25 countries in FATF 'grey list'. These countries are under increased monitoring and they have to address strategic deficiencies to counter money laundering, terrorist financing, and proliferation financing.

Pakistan's history with FATF's 'grey list' dates back to February 2008, when it was placed in the monitoring list. In June 2010 it was removed from the list, only to be brought back in February 2012, and then removed again in February 2015.

It was brought back in the list again for the third time in June 2018, and was later removed in October 2022 with FATF asking Pakistan to continue to work with APG to further improve its anti-moneylaundering/combatting the financing of terror (AML/CFT) system.

Separately, India will next month oppose the World Bank funding to Pakistan, just as it had done in case of IMF, arguing that Islamabad had used such funds in the past to procure arms and ammunition.

World Bank is likely to review next month its USD 20 billion lending to Pakistan under the Country Partnership Framework agreed in January this year.

The funds to cash-starved Pakistan were for areas including clean energy and climate resilience for a period of 10 years beginning 2026.

"We will oppose the upcoming World Bank funding to Pakistan," the source said.

India had lobbied with IMF Chief Kristalina Georgieva and ministers of IMF board member nations against the agency extending a USD 2.3 billion assistance to Pakistan earlier this month.

New Delhi presented proofs ranging from presence of senior Pakistani military officials at the funeral of designated terrorists to data that showed that Islamabad had misused funds in last two decades with arm procurement rising exponentially.

"India is not averse to any country receiving money for development purposes. But the IMF funding was not the right thing to do at a time when there were border tensions between India and Pakistan and a situation of war. Also, Pakistan has a history of spending not for people, but for buying arms," the source said.

According to the public data, Pakistan spends on average around 18 per cent of its general budget on "defense affairs and services", while even the conflict-affected countries spend on average far less (10-14 per cent of their general budget expenditure).

Further, Pakistan's arms imports increased dramatically from 1980 to 2023 by over 20 per cent on average in the years when it received IMF disbursements in comparison to years when it did not receive the same. PTI JD ANZ JD ANU ANU