Hawala Transactions And Remittance Transfers: India's Struggle With Illegal Money Flows

Article by Vijay Pal Dalmia, Advocate, Supreme Court of India and Delhi High Court, Partner & Head of Intellectual Property Laws Division, Vaish Associates Advocates, India

India's position as a growing economic powerhouse has brought with it the challenges of managing financial flows, including both legitimate remittances and illegal money transfers. Hawala transactions, an ancient informal money exchange system, and remittance transfers play a significant role in the movement of funds within and across borders. While remittances contribute positively to the economy, hawala transactions pose a considerable threat, facilitating illegal money flows and money laundering. This article explores India's struggle with illegal money flows through hawala and remittance transfers and the measures taken to combat this financial menace.