FATF’s Call: Interrogating India’s Financ

Historical grievances, mostly from the aftermath of the thousand-year-long Muslim reign in the Sub-Continent, taint the complex relations between Muslims in India and Pakistan. The hatred, which is especially noticeable in India, seems to have its origins in an unbalanced historical narrative. The Rashtriya Swayamsevak Sangh (RSS), an ultra-right-wing Hindu organisation in India, has been spreading stories about how Hindus were violently oppressed, dehumanised, and subjugated during the Muslim era. The narrative of revenge, which holds that the present generation of Hindus should seek payback for the perceived injustices of the past, has been aided by these self-created historical truths.
The Rashtriya Swayamsevak Sangh (RSS) and its policy branch, the Sangh Parivar, are actively backed financially and morally by the Indian diaspora. Concerns regarding financial integrity are raised by evidence that the International Human Rights Watch has produced, which suggests that the RSS has been using money that has been laundered for its operations. The Financial Action Task Force (FATF) has unexpectedly avoided looking into India, raising concerns about how well international monitoring addresses possible human rights and financial transparency issues.
Human Rights Watch revealed financial ties between Sangh Parivar and US/UK organisations in a study they released in April 2002, detailing crimes against Muslims in Gujarat perpetrated under the BJP government’s watch. Another investigation, published in November 2002, described the financial connections between Sangh Parivar organisations that engage in violence against minorities and the US-based Indian Development and Relief Fund (IDRF). The report of the Concerned Citizens Tribunal emphasised global financial links, linking the UK-based Hindu Sevak Sangh (HSS) to the financing of Sangh Parivar’s terror-related operations in India. Similarly, it was discovered that the Bajrang Dal was financed by the VHP, also referred to as the World Hindu Council overseas, using donations from the US and the UK. According to recent data, HSS and US organisations collaborate extensively, affecting thousands of families and incorporating a sizable youth majority in their weekly programs.
Right-wing Hindu groups received contributions of $3.3 million from Sewa International and $27 million and $3.9 million, respectively, from the Ekal Vidyalaya Foundation and VHP between 2001 and 2012. $1.9 million was awarded by the Infinity Foundation to further Hindu supremacist causes in academic institutions and research centers. Notably, the RSS, Sangh Parivar, and BJP have been accused of funding terror-related actions against Indian minorities through the real estate and gold industries in India.
FATF’s history is characterised by its dedication to fighting financial crimes all across the world. FATF uses 40 worldwide standards as a framework to help national authorities apply policies that are operational, legal, and regulatory. Since its founding, FATF has worked to establish guidelines and encourage the efficient application of laws prohibiting the funding of terrorism and money laundering. But when it comes to dealing with particular nations, the efficacy of these initiatives is questioned, raising issues of justice and openness.
Following an exposé by British Talk TV editor Isabel Oakeshott that exposed rampant money laundering in the nation, India is becoming the subject of intensified international attention. The Financial Action Task Force (FATF) highlighted insufficient anti-money laundering (AML) processes in 2010 and that this raised questions about the legitimacy of government. According to experts, money laundering associated with illicit commerce may account for as much as 5% of India’s GDP.
The study highlights how Indian law enforcement is aware of connections between networks involved in terrorism, drug trafficking, organised crime, and the laundering of illicit money. Previous data points to cooperation between Indian agencies; one such instance is the purported involvement of RAW in terrorism financing in Pakistan. Incidents involving former naval servicemen spying for Israel in Qatar and claims of complicity in the assassinations of important Sikh figures in Canada, including Hardeep Singh Najjar and Sukhdool Singh, further damage India’s reputation internationally.
The Public Authority of India estimates that illicit money laundering costs the nation about $18 billion annually, making it a major hub for global money laundering operations. Over 884 Indian firms have been implicated in money laundering, according to a research report by the Federation of Indian Chambers of Commerce and Industry. These organisations handled illicit financial resources valued at 50 billion Indian Rupees in 2018 alone. A shadow report to the FATF suggests potential misuse of government agencies like the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and National Investigating Agency (NIA) for political purposes, as claimed by anonymous members of Indian civil society. Critics argue that these agencies, including real estate and other non-financial businesses, may struggle to navigate India’s complex Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) laws due to a lack of transparency and language barriers.
Beneath the facade of being the biggest democracy in the world and a “shining India,” a more sinister reality comes to light. The BJP’s utilisation of dubious methods to propagate the hindutva doctrine is concerning, as evidenced by claims of mismanagement inside governmental agencies. India is perceived as a destabilising force that finances international crimes and terrorism for its own purposes through shadow networks now that the BJP is in power. Even while the FATF acknowledged in 2013 that India had complied with its 2010 recommendations, more evidence—including the FATF’s own report—indicates that the country’s frameworks are becoming weaker and it is becoming more vulnerable to being used to finance terrorism. India may end up on the FATF grey list as a result of the FATF’s ongoing Mutual Evaluation Review (MER), which was started on November 3, 2023. The critical international evaluation of India’s financial policies reveals extensive money laundering, financing of terrorism, and a worrisome absence of regulatory supervision. International organisations, especially the FATF, must move quickly to address India’s financial wrongdoings and avoid creating a risky precedent for international efforts to combat money laundering and terrorism financing. The risks are great, and if nothing is done, there may be major global repercussions.
There are serious concerns about India’s alleged mishandling of governmental agencies, money laundering, and financing of terrorism. The international community, and the Financial Action Task Force in particular, must take decisive action on these challenges. Considering the gravity of the situation, adding India to the FATF grey list would be a sign of the nation’s commitment to fighting financial crimes as well as promote a more open and accountable financial system. Given how closely the world is watching India’s financial practises and the possible repercussions of inaction, such decisions have a significant worldwide impact.

The writer frequently contributes to issues concerning national and regional security, focusing on matters having a critical impact on these milieus. She can be reached at omayaimen333

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