Indian enforcement agencies are intensifying scrutiny of suspected hawala and illegal money transfer networks operating within the China–India business corridor, following emerging intelligence that points to the alleged involvement of individuals studying and working abroad, particularly in China.
According to claims circulating on social media and inputs reportedly available with investigative agencies, a section of Indian nationals who travelled to China for higher education—especially medical studies—are suspected of being involved in facilitating unauthorised cross-border money transfers. These individuals allegedly function as intermediaries in informal value transfer systems, commonly referred to as hawala, which operate outside the regulated banking framework.
Alleged Modus Operandi
Sources familiar with the matter indicate that these networks are purportedly being used to move funds linked to online betting platforms, gaming applications, and instant loan apps that are allegedly operated or controlled by Chinese entities. The funds are said to be routed through a complex web of mule accounts, cryptocurrency wallets, and informal settlements, bypassing India’s foreign exchange and anti-money laundering regulations.
Investigators believe that the presence of Indian students in China provides a convenient cover for maintaining accounts, coordinating settlements, and moving money under the guise of education-related expenses and remittances. However, officials caution that these are allegations under examination and not established findings at this stage.
Use of Student Status Under Lens
Enforcement agencies are reportedly examining whether student status has been misused to evade closer regulatory scrutiny. Officials note that while the vast majority of Indian students abroad are law-abiding, isolated cases—if proven—could indicate exploitation of legitimate travel and residence channels for unlawful financial activity.
Legal experts point out that any such activity, if substantiated, would attract stringent provisions under the Prevention of Money Laundering Act (PMLA), Foreign Exchange Management Act (FEMA), and relevant sections of the Indian Penal Code.
Private Sector Employees Also Under Scanner
Beyond students, agencies are also said to be analysing the role of employees of private firms who may be assisting in hawala operations, either by providing access to bank accounts, payment gateways, or internal systems. Investigators believe that coordinated probes by multiple departments could uncover extensive transactional data and communication trails.
Ongoing Probes and Inter-Agency Coordination
Officials emphasise that investigations are ongoing and evidence-based. Multiple agencies, including financial intelligence units and cybercrime divisions, are believed to be coordinating to trace fund flows, identify beneficiaries, and establish links—if any—between foreign operators and domestic facilitators.
Authorities have reiterated that enforcement action will be taken strictly in accordance with law, and no conclusions should be drawn until investigations are complete.
Caution Against Generalisation
Experts and policymakers have urged caution against sweeping generalisations that may stigmatise students or professionals abroad. Any wrongdoing, they stress, must be assessed on an individual basis and proven through due process.
As digital payments, online gaming, and cross-border services expand rapidly, regulators are increasingly focusing on tightening oversight mechanisms to prevent misuse of financial systems while safeguarding legitimate economic activity.
