2023 · GS Paper 3 · Q20 · 15 marks
Give out the major sources of terror funding in India and the efforts being made to curtail these sources. In the light of this, also discuss the aim and objective of the 'No Money for Terror (NMFT)' Conference recently held at New Delhi in November 2022.
In short
Terror funding in India comes from cross-border state sponsorship, narcotics, fake currency, hawala, extortion and crypto, curbed through the UAPA, PMLA, NIA and FATF pressure. The NMFT Conference in New Delhi in November 2022 sought zero tolerance and a permanent secretariat.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 279 words
State sponsorship
Lashkar-e-Taiba and Jaish-e-Mohammed draw support from Pakistan, which the FATF grey-listed from 2018 to 2022.
Narco-terror and FICN
The nearly 3,000 kg heroin haul at Mundra (2021) and fake currency routed via Nepal and Bangladesh fund militancy.
Hawala and trade
Hawala networks move money unseen, and cross-LoC trade was suspended in April 2019 after misuse for cash and arms.
Extortion and new channels
Maoist levies, misused donations and crypto assets add hidden routes.
Laws
The UAPA (amended 2019) lets the NIA attach terror property, and the PMLA covers virtual digital assets since 2023.
Agencies and diplomacy
The NIA's terror-funding cell and FIU-IND track money trails, and the FATF placed India in "regular follow-up" in 2024.
Review and renew
It built on Paris (2018) and Melbourne (2019), covering terror-financing trends, funding channels, new technologies and cooperation.
Zero tolerance
India rejected any "good" or "bad" terrorism and proposed a permanent NMFT secretariat.
Close new gaps
Regulate crypto and crowdfunding and fuse NIA, ED and FIU-IND data.
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Question from the official UPSC Civil Services (Main) Examination 2023 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.