[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)

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.