India Asks Italy and ADB to Cut Funding to Pakistan Amid Escalating Diplomatic Tensions
Context: The Pahalgam Terror Attack and India's Diplomatic Fallout
India has escalated its diplomatic offensive against Pakistan following the April 22 terrorist attack in Pahalgam, Jammu and Kashmir, which resulted in the tragic deaths of 26 people, many of whom were tourists. This gruesome attack has triggered a series of retaliatory steps from India, targeting Pakistan's financial and international support systems.
India’s Demand to Italy: Cease Financial Support to Pakistan
At the 58th Annual Meeting of the Asian Development Bank (ADB) in Milan, Finance Minister Nirmala Sitharaman met with her Italian counterpart Giancarlo Giorgetti. During the bilateral discussion, India formally demanded that the Italian government halt its financial assistance to Pakistan.
This move is significant, considering that Italy is a major partner of the United Nations Development Programme (UNDP), especially in Pakistan. According to the UNDP website, the Italian Development Cooperation supports multiple ongoing initiatives in Pakistan, making it a vital contributor to the country’s international development assistance.
In a separate meeting with Asian Development Bank (ADB) President Masato Kanda, Finance Minister Sitharaman reiterated India's call for the ADB to withdraw funding support to Pakistan. This demand was reportedly one of the major points of discussion between the two during the Milan conference.
India’s move to involve international financial institutions is a clear sign of its broader strategy to isolate Pakistan economically and hold it accountable for cross-border terrorism.
Suspension of the Indus Waters Treaty
In another strong move, India has also suspended the 1960 Indus Waters Treaty, a World Bank-brokered agreement that has governed water-sharing between India and Pakistan for over six decades. This suspension, if fully implemented, will drastically reduce Pakistan’s water supply in the long term, adding significant pressure on its already strained resources.
India to Approach FATF for Grey Listing Pakistan Again
Sources indicate that India also plans to approach the Financial Action Task Force (FATF) with the demand to place Pakistan back on its grey list, due to its continuing patronage and sheltering of terror elements. This diplomatic offensive is part of a larger campaign to curtail Pakistan’s access to international financial aid and reputation in multilateral forums.
India's Broader Message at ADB Annual Meeting
While targeting Pakistan’s funding sources was a key agenda, Finance Minister Sitharaman also presented India’s economic vision and policy priorities at the ADB meeting. She highlighted India's push for private-sector-led growth and a strong regulatory ecosystem supported by initiatives like:
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Insolvency and Bankruptcy Code (IBC)
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Corporate Tax Rate Reduction
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Goods and Services Tax (GST)
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Production-Linked Incentives (PLI)
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National Infrastructure Pipeline
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GatiShakti National Master Plan
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Startup India Mission
She emphasized that India offers fertile ground for ADB to pilot innovative financing models and development products, reinforcing India’s status as a leader in sustainable economic reform.
Viksit Bharat 2047 Vision Gains ADB Backing
The ADB, under the leadership of President Masato Kanda, expressed full support for India's developmental priorities, aligning with Prime Minister Narendra Modi’s vision of a “Viksit Bharat” (Developed India) by 2047. This endorsement signifies a growing trust in India’s leadership role within multilateral development frameworks.
India’s Growing Influence in International Financial Diplomacy
Sitharaman is leading a high-level Indian delegation from the Department of Economic Affairs and the Ministry of Finance at the ADB Annual Meeting, held from May 4 to 7 in Milan, Italy. She is scheduled to participate in critical events including:
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Governors’ Business Session
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Governor’s Plenary Session
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ADB Governors’ Seminar on “Cross-Border Collaboration for Future Resilience”
Her presence and strong statements underscore India's rising influence in global economic forums and its readiness to use these platforms to achieve strategic geopolitical objectives.
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