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 corruption landscape poses significant challenges for foreign direct investment (FDI), as highlighted by the G20 Anti-Corruption Ministerial Meeting held in Kolkata in August 2023. Despite the government's efforts to combat corruption, issues like red tape and bribery remain prevalent, particularly in the judiciary, police, and public procurement sectors. With a low score of 39 on Transparency International's Corruption Perception Index, India ranks 93 out of 180 countries, indicating a high corruption risk that affects both public and private sectors.

India is the fastest growing large economy in the world, currently ranking 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, driven by structural reforms, favorable demographics, and industrialization, while the government aims for India to become a developed nation by 2047. However, challenges such as high tariffs and protectionist measures continue to hinder foreign investment and trade.

India's investment climate has improved due to recent structural economic reforms aimed at enhancing the business environment for foreign investors, including liberalizing foreign investment restrictions and modernizing bankruptcy laws. However, protectionist measures, such as high tariffs and localization requirements, continue to pose challenges for foreign firms seeking to enter the Indian market. The government is actively promoting foreign direct investment through various initiatives and has established mechanisms to facilitate smoother project implementation.