India recently re-elected Prime Minister Narendra Modi and his National Democratic Alliance (NDA) government for a third term. Shortly after the new government was formed, the country achieved a significant milestone by being placed in the ‘regular follow-up’ category by the Financial Action Task Force (FATF). This elite category is shared by only five G20 countries, including India. Placing in this category means India needs to submit a progress report on recommended actions only in Oct 2027. The Ministry of Finance hailed this achievement as a significant milestone in the nation’s efforts to combat money laundering (ML) and terrorist financing (TF). This recognition is expected to boost India’s economy by providing better access to global financial markets and increasing investor confidence.
The recognition by FATF will not only enhance India’s capacity to lead the global effort on countering cross-border terror financing and money laundering but will also facilitate the global expansion of India’s instant real-time digital payment system, the Unified Payments Interface (UPI). The success in this evaluation reflects the effective measures implemented by the Indian government over the last decade to safeguard its financial system from ML/TF threats. The implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent regulations on cash transactions, has increased financial inclusion and digital transactions, making transactions more traceable and mitigating ML/TF risks. The government’s multi-pronged strategy and legislative changes have aligned with international standards and yielded positive results in dismantling terror funding networks and combating black money, narcotics, and terror financing.
Before coming back to power, the Modi government outlined its vision to make India an economically stronger nation by 2047. External Affairs Minister S Jaishankar emphasized the goal of ‘Viksit Bharat’ (developed India) by 2047, as envisioned by Prime Minister Narendra Modi, with the aim of reaching a $30 trillion economy by 2047. The government has set ambitious economic goals of reaching a $5 trillion economy by 2027-28 and a $30 trillion economy by 2047. The recent recognition by FATF is a step towards reflecting India’s economic growth internationally and achieving these ambitious goals. Finance Minister Nirmala Sitharaman has set the path to touch the $5 trillion mark by 2027-28, believing that India will indeed become the third-largest economy as envisioned by the Prime Minister.
The Modi government’s focus remains on attaining a robust economy within a set timeframe. The Centre’s efforts are dedicated to strengthening the nation and fulfilling the dream of transforming India into an economic powerhouse. The government has highlighted its roadmaps for economic growth and industrial revival, urging business associations to partner with the government to achieve these goals. The new government’s commitment to economic development, coupled with the recognition by FATF, marks a positive step towards realizing India’s potential as a global economic leader. It now rests on the implementation of strategic measures and policies by the government to turn this vision into reality and propel India towards economic prosperity and growth in the coming years.
