In the past two years, India has strategically leveraged its leadership in the Global South to build a strong support system within global forums, a position it now aims to use in advancing its financial agendas, including promoting transparency in cross-border transactions.
According to a senior official in the Ministry of Finance, who wished to remain anonymous, India has positioned itself as a leader of a bloc within the global Financial Action Task Force (FATF), representing developing countries from the Global South.
The FATF, as the apex standards-setting body for combating money-laundering and terror financing, consists of 37 member countries and two regional bodies, with the majority being developed nations from the Global North.
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“We have a strong support within the system (FATF) because India is kind of a leader for the Global South now. We are carrying this support in every possible way. That is what we have achieved in the last two years,” says the official.
Both the Finance Ministry and the Reserve Bank of India (RBI) are eager to enhance transparency in cross-border transactions, aiming to tackle the issues of money laundering and terrorism funding amid a surge in such transactions within the country.
However, the house remains divided on the changes in disclosure norms proposed by India. “Generally, everybody in the FATA would speak of higher transparency. But there are some concerns and an open debate is going on. No one has given a clear stand till now,” the official adds.
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In such case, the government sees it as crucial to leverage the support it has gained over the past few years to advance its economic agendas on international platforms. For example, at the World Trade Organization (WTO), India has already effectively defended the interests of its farmers and fishermen by utilizing backing from countries in the Global South.
The issue of cross-border transactions will be discussed next year in Mumbai, with stakeholders from the private sector and regulators of member countries in attendance. An evaluation report for India is due to be released on September 19.
