Progress in Global Terrorism Index helping India to combat illicit financial flows

Improvements in internal security: India, one of the world's fastest-growing nations, is making remarkable strides in addressing security concerns, as evidenced by its notable progress in the Global Terrorism Index (GTI) and crime index. According to a comprehensive report by FICCI CASCADE titled 'Hidden Stream: Linkages between Illicit Markets, Financial Flows, Organised Crime, and Terrorism,' India's GTI score stands at 7.43, and the crime index score is 44.7, indicating positive developments compared to levels observed in 2016.

This progress is further substantiated by a reduction in terror incidents and fatalities from 2016 to 2020 and a recent decline in crime cases. The report also reveals a low prevalence of organised crime actors in India, underscoring the country's concerted efforts to combat criminal activities. 

Additionally, India demonstrates a relatively lower tendency to export counterfeited products, showcasing the country's commitment to maintaining the integrity of its trade practices.

6 Cs policy playbook

The report recommends a strategic '6 Cs' policy playbook to mitigate these threats effectively:

• Cognisance of terrorism and organised crime under regulatory framework
• Continuous and critical evaluation of illicit financial flows
• A central nodal agency for greater coordination
• Creating awareness and changing consumer preferences
• Combating trade-based money laundering
• Cooperation and coordination at the international level

The implementation of the '6 Cs' approach is anticipated to shield India from the adverse effects of illicit financial flows and facilitate economic growth by removing barriers to progress. According to UNODC estimates, money laundering amounts to 2-5 per cent of the global GDP, showcasing the magnitude of the issue that hinders economic development.

India losing $159 billion to money laundering

According to the report, the Indian economy is struggling to restrict money laundering which is estimated at a staggering $159 billion, underlining the urgency to address this issue. As India endeavours to become a $5 trillion economy, it is crucial to reform its current trade composition, which accounts for 30 per cent, in order to actualise this ambitious goal.

“In 2021, the economic impact of violence was estimated at $1.17 trillion, which accounts for approximately 6 per cent of the country's GDP in terms of purchasing power parity (PPP) and violence per capita impact is estimated at $ 841 at PPP,” the report stated.

The report also delves into the hidden linkages in 122 countries, decoding the relationship between organised crime actors and the illegal economy, including trade-based money laundering, counterfeiting, arms and drug trafficking, and terrorism.