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#973, 3 March 2003
Terrorism and Organized Crime in India
D Suba Chandran
Research Officer

Organized crime and terrorism result from ineffective governance and have developed a symbiotic relationship; nevertheless, it is essential to differentiate them. Neither are all terrorist acts organized crime, nor are all organized criminal acts terrorism; in most developed countries, organized crime thrives with little or no terrorist activities, and in most developing countries, terrorism exists along with varying levels of organized criminal activity.


The differences between them rest on means and ends. Terrorism aims to overthrow the existing government by altering the status quo. Organized crime, on the other hand aims to form a parallel government while coexisting with the existing one; any change in the status quo is only circumstantial and born out of convenience rather than zealous revisionist policy. Secondly, terrorism primarily uses violent means, whereas organized crime prefers to be non-violent notwithstanding odd resort to belligerence. Third, terrorism is driven purely by political objectives despite exploitation of regional, national and religious sentiments to achieve their ends; conversely, economic objectives are the operational determinants of organized crime.


What are the linkages between terrorism and organized crime and how are they relevant in the Indian context? While organized crime involves many activities, its linkages with terrorism stem from illegal trafficking of drugs, arms and human beings and money laundering. Terrorist groups, whether indigenous or sponsored by outside states, need arms and money for their fight against the security forces. Organized crime conglomerates need a clientele and couriers who can smuggle drugs, arms and human beings across the countries and regions.


In India, the linkages between the two exist at national and transnational levels. At the national level, both terrorists and those involved in organized crime are within India. At the international level, collaboration exists between transnational syndicates and terrorists from inside and outside India.


In India’s northeast, almost all the militant groups run a parallel government or have their areas of influence and are involved in collecting money directly from the people. Much of the government funds reach the militants indirectly due to misgovernance. Government officials in conflict zones are either threatened or bribed to award contracts to individuals patronized by the militant groups. Contracts apart, essential commodities like rice and kerosene reach the militant groups directly which are then sold to the public at much higher prices. This cycle, though unnoticed in other parts of India, is a clear example of the linkage between organized crime and terrorism inside India.


Extortion, kidnap, contracts and black marketing still fall short of financing the nefarious activities of the militants. This is where transnational drugs and arms syndicates come into play. Terrorist organizations in India, especially in the northeast, mobilize funds by becoming couriers of illegal drugs and arms and at times even human beings from one point to another within the country. Some of the infamous entry points from Southeast Asia include Moreh and the entire Chittagong Hill tracts, especially Cox’s Bazaar. Initially, international criminal syndicates had their own network; however, with these routes being taken over by various terrorist groups in the northeastern states, the syndicates started using these groups instead of bribing them to let their consignments get through.


In Kashmir, the linkages between terrorists and organized crime exist at a different level. Unlike the northeast, reliance on funds from extortion and other related means is minimal. There is no parallel government in Kashmir and government resources do not reach militant hands. However, external funds compensate for inadequate internal mobilization. External funds reach the militant organizations fighting in Kashmir thorough various means. For instance, enormous funds that are mobilized in Pakistan and other Muslim countries, especially in the Gulf, are channeled through various organizations in Pakistan to Kashmir. Markaz dawa al Arshad, for example, mobilizes funds from inside and outside Pakistan, to support its militant wing, Lashkar-e-Toiba. Besides, external funds are also routed through select organizations and individuals in Kashmir, which finally reach the militants. Money laundering plays a significant role. Hawala (money laundering) transactions take place swiftly and effectively in Kashmir. Besides, it is also believed that the ISI uses drug money to fund militant activities in Kashmir.


Another significant relationship between organized crime and terrorism, especially in Kashmir, is through the spread of counterfeit currency. Terrorists are the main couriers of Indian counterfeit currency inside Kashmir, which then spreads all over India. Even guides for the militants from across the border are paid with counterfeit money. In fact, when some of the ‘indigenous’ militants were also paid with counterfeits, it resulted in squabble between them and the so-called guest militants.


Besides Kashmir and the northeast, sporadic incidents in other parts of India like the Bombay blasts, for instance, have exposed the connection between terrorism and organized crime. This is distinct from the traditional linkages flourishing between organized crime syndicates and local criminals.

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