Financial Intelligence: The Next Frontier for Indian Global Leadership

As New Delhi focuses on expanding its foreign policy ambitions, an opportunity exists for it to become an international leader in financial intelligence. Neil Noronha’s new working paper, “Follow the Money: India Should Become an International Leader in Financial Intelligence,” argues that to solidify a claim to global leadership in this field, the central government must first reform its own financial intelligence apparatus, increase the number and scope of its international activities, and assume leadership of international organizations. 

Carnegie India hosted a private roundtable discussion on the paper to assess the desirability and feasibility of an Indian bid for expanded leadership in international financial intelligence. The discussion was moderated by Vivek Chadha, a research fellow at the Institute for Defense Studies and Analyses.  

Discussion Highlights

• Experience in Financial Intelligence: Participants highlighted that India’s role in curbing illicit financial threats has grown since the nation’s economic liberalization. They noted that domestically India has made great strides in curtailing black money and terrorist financing operations. Further, participants also emphasized India’s success in dealing with the informal banking sector. Participants stated that India is already an integral part of the global financial intelligence system and an active member in various international financial institutions, thereby greatly enhancing India’s role as a potential leading power. 
• A Regional Leader: Participants noted that the first step towards India’s emergence as an international leader in financial intelligence is for India to establish itself as a regional leader in the field. Participants also underscored that although India has taken the lead in curbing the movement of illicit money across South Asia, India needs to increase bilateral cooperation in financial intelligence with all South Asian nations. Participants added that the capabilities India has developed over the course of its domestic experience can help make the case for India as an international leader in financial intelligence. 
• Need for International Cooperation: Participants said that globalization has played a major role in shaping the field of financial intelligence. They noted that the lack of domestic capacity has enhanced the need for structural leadership at the international level. Participants highlighted that many countries lack the infrastructure and technology required to monitor illicit financial threats within their own economies, thereby increasing the need for nations to cooperate with one another. They also emphasized that India has taken an active role in contributing to multiple international financial intelligence organizations.
• Moving Forward: Participants stressed the increasingly interconnected system of financial intelligence. They stated that while international cooperation in tackling financial crimes, particularly counterfeit currency smuggling and tax evasion, is still developing, nations must also grapple with the implications of new financial applications such as cryptocurrencies. Participants also discussed the need for governments to work with private players and academic institutions to develop a holistic approach to fight against global issues like terrorist financing and money laundering. 

This event summary was prepared by Rhea Menon, a research assistant at Carnegie India.