The Financial Action Task Force (FATF) has sharply condemned the deadly terrorist attack in Pahalgam on April 22, 2025, emphasising that such violence “couldn’t happen without money.” In a June 16 statement, the global watchdog pledged to intensify oversight of national and international systems aimed at choking the financial lifelines of terrorist groups.

The attack, which claimed 26 civilian lives — mostly tourists — in the Baisaran Valley, has triggered diplomatic and financial countermeasures against Pakistan, widely accused of harboring terror infrastructure. New Delhi is now reportedly exploring strategies to have Pakistan reinstated on FATF’s grey list — after its removal in October 2022 — and to target the country’s ongoing IMF bailout.

Support for India’s financial pressure tactics is growing. At the BRICS Parliamentary Forum in Brasilia, members strongly condemned the attack, committing to cut terror funding and ramp up intelligence cooperation. Meanwhile, AIMIM leader Asaduddin Owaisi argued Pakistan as "terror epicentre" and urged reinstatement on the grey list to ensure global security.

International frameworks are also rallying. At the India–Central Asia Dialogue, participants urged accountability for terror sponsors and pledged full implementation of FATF and UN guidelines. FATF’s renewed vigilance signals a broader shift toward financial weaponisation in counter-terrorism, framing economic pressure as a core element in debilitation of transnational terror networks.