WEBDESK: The Financial Action Task Force (FATF) has exposed India’s digital role in global terror financing, revealing that its e-commerce platforms and online payment services are being actively exploited to support terrorist activities.
FATF, in its latest report published in July 2025, mentioned the 2019 Pulwama attack and the 2022 Gorakhnath Temple incident as obvious examples of terrorist organisations using financial technologies in India to buy materials and transfer money outside the country.
Although the activities are conducted in the digital economy of India, they extend beyond India and such activities can be connected with international terror groups and international networks. The report casts doubt upon the image of India as the victim of terrorism and suggests grave regulatory lapses and potential state involvement.
Reports by FATF have even increased the cry to have India blacklisted as analysts say failure to move swiftly could mean these virtual loopholes will remain lifelines to worldwide terrorism.
The Financial Action Task Force (FATF) has expressed serious concern on the increasing misuse of online platforms and payment services by terrorists to finance their operations.
In a new report, it cited examples from India, including the deadly 2019 Pulwama attack and the 2022 Gorakhnath Temple incident, to highlight growing threats linked to digital finance systems.
According to the FATF’s Comprehensive Update on Terrorist Financing Risks, some terrorist groups continue to receive help from national governments.
“Delegations reported on this trend by referring to the use of state sponsorship for TF either as a fundraising technique or as part of the financial management strategy of certain organisations engaging in terrorist acts,” the report said. This support includes direct funding, logistical help, materials, or even training.
A key case study in the report focuses on the Pulwama suicide bombing where 40 CRPF personnel were killed. Investigators found that aluminium powder, used to make the explosive device more deadly, was bought through the Amazon platform.
The April 3, 2022, attack at Gorakhnath Temple was also referenced. Financial investigators discovered the culprit had used PayPal to send INR 669,841 (nearly $7,736) to people in other countries.
He also received over INR 10,000 from a foreign account. By using VPN services, the attacker tried to hide his location and identity. FATF noted, “Due to the suspicious nature of these transactions and the potential for TF, PayPal suspended the accused’s account, thereby preventing further illicit fund transfers.”
The report highlights that with the rise of digital finance and peer-to-peer (P2P) payment systems, terrorist groups now have more ways to raise and move money. These platforms often allow transactions to take place under pseudonyms or fake names, making it hard to trace who is sending or receiving the funds.
E-commerce platforms are also being used not only to buy explosives or chemicals like in Pulwama but also to sell items to raise money. The FATF said, “Traded goods can indeed offer disguise to value being transferred from an accomplice to another member of the network.” This tactic mimics trade-based money laundering.
The watchdog explained that online payment services have become attractive due to their speed, low cost, and weaker checks compared to traditional banking systems. “These payment services also appear attractive for terrorist organisations… with the possibility for enhanced opacity on initiators and beneficiaries through pseudonyms or fake accounts,” it said.
Ethnically or racially motivated terror groups were also found using such services to sell books, music or merchandise, spreading their extremist ideologies and making money at the same time. Europol has also assessed that online payments are being used by all kinds of terror groups, from lone actors to foreign terrorist fighters.
FATF President, Elisa de Anda Madrazo said: “This continued abuse of the financial system poses a serious threat to global security and undermines international peace. Countries around the world must use the intelligence in this report to build a stronger picture of the threats they face and harness the tools available through the FATF Global Network to strengthen international cooperation and intelligence sharing.”
In June, after the Pahalgam terror attack in which 26 people died, FATF had warned that such attacks are not possible without financial support. It had then promised to release a detailed study, which now forms part of this new report involving inputs from 200 jurisdictions.
The watchdog’s latest warning makes it clear: as online financial services grow, so does the risk of them being used for terrorism, turning the country’s unchecked digital activities into a serious global security threat.
FATF exposes India’s digital role in global terror financing
The Financial Action Task Force (FATF) has now officially exposed what many in the region have long known and warned about, India’s digital role in global terror financing.
India’s digital infrastructure, particularly its e-commerce platforms and online payment services, is being actively misused for terror financing.
The watchdog cited the Pulwama attack of 2019 and the Gorakhnath Temple incident of 2022 as clear examples of how India’s supposedly “secure” systems are being exploited to fund and facilitate terrorism.
This isn’t just a regulatory lapse. India has become the global junction for illicit capital flows, a dirty marketplace where money laundering, terror financing, and illegal fund transfers find convenient passage.
Beneath the glossy veil and facade of its tech-savvy image, India’s digital economy is a smokescreen, a ploy. Its online payment systems do not safeguard against terrorism, rather, they empower it.
While New Delhi screams about being a victim of terrorism, it is quietly enabling the very networks it claims to fight. Whether it is cash flowing to extremist networks or logistical support to militant organisations, India’s digital financial platforms are the oxygen supply line to terror across borders.
The time for appeasement and blind trust is over. The FATF must take decisive and immediate action. India must be placed on the FATF Blacklist. Anything less will be a betrayal of the global fight against terrorism and a green light to rogue regimes hiding behind e-commerce codes and QR scans.
Terrorism wears a digital mask in India, and the world must now unmask it.
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