Morning Brief: US Stops Short Of Fully Backing India’s Retaliation Against Pakistan; India Prepares Groundwork To Push Pakistan Back On FATF Grey List; And More

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US Stops Short Of Fully Backing India’s Retaliation Against Pakistan

US Vice President J D Vance, reacting to the Pahalgam terror attack that killed 26 people, said he hoped India would respond “in a way that doesn’t lead to a broader regional conflict.” In a Fox News interview, he added, “We hope, frankly, that Pakistan, to the extent that they’re responsible, cooperates with India to make sure that the terrorists... are hunted down and dealt with.”

While offering condolences, Vance stopped short of backing any potential Indian military response, and made no direct call for accountability from Islamabad. His remarks, while measured, are being seen in India as falling short of the kind of clear support expected from a strategic partner. As Delhi weighs its next move, the US response so far reflects caution rather than conviction.

India Prepares Groundwork To Push Pakistan Back On FATF Grey List

In response to the recent terror attack in Pahalgam, India is considering pushing for Pakistan's re-entry into the Financial Action Task Force (FATF) ‘grey list’ to choke terror-related financial flows. This move would require building consensus among FATF’s 40 members, many of whom, including the United States, the United Kingdom, France and Saudi Arabia have expressed condolences after the attack.

India is also likely to raise objections at the International Monetary Fund (IMF) over its $7 billion aid programme for Pakistan, citing concerns about fund diversion to support terrorism. Pakistan was previously on the FATF grey list from 2018 to 2022, which curtailed its foreign funding and compelled limited action against terrorist groups.

India Starts New Fiscal Year On Strong Note

India’s economy started the new fiscal year strongly, with Goods and Services Tax (GST) collections reaching a record Rs 2.37 lakh crore in April, up 12.6 per cent from last year, fueled by strong domestic consumption and exports.

Digital transactions via UPI approached 600 million daily, growing 34.5 per cent annually, while FASTag payments for tolls and parking increased 17 per cent. Two-wheeler and SUV sales reflected optimism, with TVS and Mahindra reporting 15 per cent and 28 per cent growth, respectively, though car sales were mixed.

In contrast, the US economy contracted by 0.3 per cent in Q1 2025, and China’s factory activity declined sharply, underscoring India’s resilience amid global challenges. HSBC’s flash PMI data indicated India’s private sector activity at an eight-month high, cementing its status as the world’s fastest-growing economy, with FY26 growth forecasted at 6.2-6.3 per cent by the IMF and World Bank.

Other Developments

Rajnath Links Pakistan To Pahalgam Attack

Rajnath Singh, in a conversation with US Defence Secretary Pete Hegseth, stated that Pakistan has a history of supporting, training, and funding terrorist organisations—marking the first time a senior Indian minister has directly named Pakistan in connection with the Pahalgam terror attack. Hegseth's post on X expressed "strong support" for India and offered condolences for the loss of innocent lives.

External Affairs Minister S Jaishankar also spoke with US Secretary of State Marco Rubio, insisting that those responsible for the attack must be brought to justice. While reiterating solidarity with India, the US also encouraged both nations to de-escalate.

Terrorists Behind Pahalgam Attack Still In South Kashmir

The NIA, now leading the probe, says the terrorists used satellite phones and equipment that evaded interception, raising concerns over the lack of preemptive security measures. Prime Minister Modi condemned the attack, vowing retaliation and warning Pakistan, which India has blamed for supporting the terrorists.

Zoho Shelves Chip Manufacturing Plans

Zoho co-founder Sridhar Vembu has shelved plans to invest in semiconductor fabrication, citing the high capital requirements and lack of confidence in the current technology. The proposed investment included a Rs 3,034 crore silicon carbide manufacturing unit in Odisha and a $400 million chip plant in Karnataka.

Vembu stated on social media that taking taxpayer money requires confidence in the technology path, which the board did not have at this stage. Zoho had submitted a proposal to MeiTY under the Indian Semiconductor Mission, aiming to build a complete silicon carbide value chain for use in EVs, automotive, and renewable energy sectors.

Trump Sends NSA To UN Following Embarrassing Chat Leak

US President Donald Trump has removed National Security Adviser Mike Waltz and nominated him as ambassador to the United Nations. Waltz faced criticism for accidentally adding a journalist to a Signal chat where top officials discussed sensitive military plans, prompting concerns about vetting and security.

Trump praised Waltz’s service and said Secretary of State Marco Rubio would temporarily take over the national security role. The UN nomination offers Waltz a face-saving exit amid doubts about Senate confirmation and internal dissatisfaction. Despite the controversy, Vice President JD Vance denied Waltz was fired, saying the move was a promotion and that he retains the president’s trust.

From The States

Punjab Gears Up For Political Showdown Over Water Dispute With Haryana

After the Bhakra Beas Management Board (BBMB) ordered the release of an additional 4,500 cusecs of water to Haryana, Punjab Chief Minister Bhagwant Mann called an all-party meeting on Friday (2 May) and a special Vidhan Sabha session early next week to pass a resolution opposing the move.

Mann, backed by AAP leaders including Arvind Kejriwal and Manish Sisodia, accused Haryana and Rajasthan of colluding to rob Punjab of its water, warning the Centre that Punjab may stop contributing paddy to the PDS. High drama unfolded at Nangal Dam, where Mann and his ministers physically blocked water release, asserting that BBMB had no authority to act without Punjab’s consent. 

Delhi-NCR Hit By Severe Storm Disruptions

Heavy rainfall, thunderstorms, and strong winds disrupted Delhi and surrounding regions on Friday (2 May) morning, diverting over 40 flights and delaying nearly 100, while providing relief from the heat. The India Meteorological Department issued a red alert for Delhi, extended until 8:30 am, warning of severe thunderstorms and winds up to 80 kmph.

Delhi airport advised passengers to check flight updates due to widespread issues. Hail was reported in the region, with the IMD urging people to stay indoors and avoid travel until conditions improved. The storm system, also affecting other parts of northern India, was expected to move west, with severe weather warnings issued for states like Uttar Pradesh, Odisha, Punjab, and Haryana.

You’re all caught up—until next time.