India Country Summary

FATF Status

India is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in India was undertaken in 2024. According to the follow-up Evaluation, India was deemed Compliant for 11 and Largely Compliant for 26 of the FATF 40 Recommendations. It was assessed Highly effective for 0 and Substantially Effective 6 of the Effectiveness ratings.

India's investment climate is significantly impacted by corruption, as highlighted by its low score of 39 on Transparency International's Corruption Perception Index, ranking it 93rd out of 180 countries. The country faces numerous challenges related to criminal activities, including human trafficking, arms trafficking, and drug trade, exacerbated by political conflicts and inadequate law enforcement. Despite efforts to combat organized crime and improve financial regulations, issues such as judicial independence, corruption at various government levels, and limited civil society engagement hinder progress.

India is the fastest growing large economy in the world, currently ranked as the fifth largest with a GDP of $3.4 trillion, and is projected to become the third largest economy by the early 2030s. The economy grew nearly seven percent in 2023, supported by effective inflation management and structural reforms aimed at improving the business environment, although challenges remain due to protectionist measures and reliance on coal for energy.

India's investment climate has improved due to recent structural economic reforms aimed at enhancing the business environment, including liberalizing foreign investment restrictions and modernizing bankruptcy laws. However, challenges remain, such as high tariffs and protectionist measures that complicate foreign participation in the market. The government actively promotes foreign direct investment through various initiatives and agencies, while also maintaining certain restrictions in sensitive sectors.