[The fight against terror financing requires both multilateral norms and domestic teeth. Critically evaluate India's record in light of its 2024 FATF Mutual Evaluation.](/upsc-mains-answer/fight-terror-financing-requires-both-multilateral-6fda29e)

Q. The fight against terror financing requires both multilateral norms and domestic teeth. Critically evaluate India's record in light of its 2024 FATF Mutual Evaluation. (15 marks, 250-350 words)

Terror financing straddles two arenas — FATF's global standard-setting and a state's own enforcement machinery. India's 2023-24 Mutual Evaluation, adopted at the June 2024 Singapore Plenary, credits it on both counts, though delivery gaps at the enforcement stage temper the verdict.

Multilateral norms: from rule-taker to rule-shaper - India entered FATF as its 34th member on 25 June 2010, only after clearing an action plan tied to deficiencies in its first evaluation [1]. - Membership of the Eurasian Group and Asia Pacific Group extends its voice across FATF-style regional bodies [2]. - India hosted the Private Sector Collaborative Forum in Mumbai (March 2025) and will hold the Vice-Presidency, July 2026–June 2027 — elected by the Plenary, a first for an Indian official [3][4]. - This perch strengthens India's long-standing demand that cross-border terror financing be judged as a compliance failure, not a bilateral quarrel.

Domestic teeth: what the evaluation validated - FATF placed India in the "regular follow-up" category — its best tier, shared with only four other G20 states — citing high technical compliance [5]. - The transition from cash to digital, aided by the JAM trinity and UPI, was recognised as shrinking room for illicit flows and easing global market access [5]. - A layered statute base — PMLA 2002, UAPA 1967, Black Money Act 2015, Fugitive Economic Offenders Act 2018 — plus FIU-IND, ED and NIA supplies reach; 2023 notifications drew virtual digital assets into the reporting net.

Where the teeth need sharpening - FATF's priority actions ask India to conclude money-laundering and terror-financing prosecutions faster; trials remain protracted, so convictions lag detection [6]. - Risk-based supervision of the non-profit sector must curb abuse without disrupting legitimate charity [6]. - Compliance among non-financial professions and smaller reporting entities is uneven, and inter-agency coordination stays case-driven. - Multilaterally, FATF's consensus-based listing process limits how far norms alone can discipline repeat offenders.

On balance the record is credible: India now helps write standards it once absorbed, and its legal design matches global benchmarks. The residual deficit is conviction-stage delivery, not architecture. Using the Vice-Presidency to press faster mutual legal assistance, while fast-tracking domestic adjudication, would convert compliance into deterrence — advancing SDG 16.4 on curbing illicit financial flows.

(~335 words)

Sources: 1. FATF Approved the Revised Recommendations… (India adopted MER 24 June 2010; admitted 34th member 25 June 2010), PIB — India's 2010 accession and action-plan follow-up 2. India Gets Membership of the Eurasian Group on AML/CFT, PIB — India in FATF-style regional bodies 3. India to host FATF Private Sector Collaborative Forum 2025, Mumbai, 25-27 March 2025, PIB — PSCF 2025 hosting 4. India to assume Vice-Presidency of FATF for the first time, PIB — Vice-Presidency, term, election by Plenary 5. FATF adopts Mutual Evaluation Report of India, June 2024 Plenary, Singapore, PIB — "regular follow-up" tier, technical compliance, digital-economy transition, market access 6. FATF country page: India (Mutual Evaluation and priority actions) — prosecution delays and non-profit-sector supervision