Investigations by the Enforcement Directorate (ED) have uncovered a sophisticated narco‑terror funding network that operates across India, revealing how proceeds from drug trafficking are funneled through illicit hawala routes and then invested in domestic businesses to finance cross‑border terrorism.
The fight against narcotics smuggling, especially its links to terror financing, has become a top priority for the Indian government. Union Home Minister Amit Shah has pledged that the Modi administration will leave no stone unturned to make India drug‑free, and the government is intensifying efforts at the district level. Multiple agencies – state police, the Intelligence Bureau, the Narcotics Control Bureau, Customs and the ED – are coordinating to dismantle drug networks. The ED’s recent probes, however, have highlighted a new dimension: money earned from narcotics trade is being laundered into legitimate ventures that appear ordinary until the trail is followed.
According to ED officials, a syndicate backed by the Inter‑Services Intelligence (ISI) operates out of Afghanistan, Pakistan and Dubai. Funds first arrive in Dubai, then are routed through hawala channels to Pakistan, Afghanistan and India. In India, the money is parked and then invested in legitimate businesses. The case of Gaurav Dawar, a heroin smuggling suspect, illustrates this pattern. Dawar and another accused, Harpreet Singh, were directed by an ISI‑linked operative, Vitaysh Koser alias Raju Dubai, to facilitate smuggling in India. They received payments in kind – cigarettes, dry dates, perfumes and betel nut – to avoid electronic transfers that would trigger scrutiny.
The ED probe found that Dawar invested in two Delhi nightclubs, Playboy Club and White Club, operated through Newera Feast and Hospitality Pvt. Ltd. These venues were used to create ghost customers, fake bookings and dummy restaurant orders, thereby mixing illicit cash into the clubs’ daily earnings. The clubs also sold cigarettes and perfumes at retail margins, turning dirty money into legal cash. Additionally, the businesses purchased kitchen equipment, linens and other goods from overseas shell companies controlled by terror networks, overpaying and accepting fake invoices to funnel funds indirectly to terrorist activities.
