The trigger for the policy change appears to have been the remarkable sting operation carried out by India Today TV that exposed the shenanigans of merchants of death in Kashmir. The outcry after the expose probably gave the government the justification it needed for strangulating the funding of separatists and terrorists.  

In fact, among the most interesting aspects of the sting operation was that separatists who were exposed didn’t seem at all surprised or suspicious that they were being offered money to provide protection for their operations and even create disturbances to further their interests. Clearly, without busting the money laundering networks in cities like Delhi, Chandigarh, Kolkata, Mumbai etc. the entire NIA operation will not change anything at all.  

Militancy in J&K originally started as a domestic movement and has now acquired transnational linkages since 1992-93. Save a small percentage of funds made through collections and donations made in Kashmir, 90% of the funding came from other countries. Estimates indicate that about US $1,00,000-200,000 have been raised by JKLF, the diaspora and other Kashmiri groups. Funding picks up in response to certain domestic events. For instance, the demolition of the Babri Masjid in 1992 led to large contributions to the kitty of terrorists operating against India. 

Kashmiri militants obtain financial support from dozens of Islamic charities and radical Islamic organisations that channel funds to terrorist groups. The Pakistan-based Markaz-ul-Dawa-Ishad, the parent outfit of LeT puts out regular advertisements in its in-house magazine, Al Dawa. It urges Muslims to donate money to Kashmir ‘Jehad Fund’. At its annual congregation in November 1998 at Muridke, near Lahore, the Markaz decided to raise Rs 5 crore including Rs 3 crore to supply weapons to the Kashmiri ‘Jehad’, 1 crore for training and 1 crore to rehabilitate Kashmir refugees in PoK.

Several FIRs filed by J&K police in 1997 indicate that senior Hurriyat leaders received donations from abroad. The nexus between narcotics and terrorism had led to a new term-Narco-Terrorism. It is recognised as one of the oldest and most dependable sources of terrorist financing, primarily because of the magnitudes of finance involved in both activities. 

To be continued....