The Financial Action Task Force (FATF) has highlighted vulnerabilities in India's precious metals and stones sector, noting its potential for money laundering and terrorist financing. The report suggests India should improve risk understanding and data collection to better address these threats,

The latest FATF report reveals that only 9,500 of the 175,000 dealers in precious metals and stones (DPMS) are registered with the GJEPC.

As a result of tax law provisions relating to cash threshold prohibition, the Dealers in Precious Metals and Stones (DPMS) sector falls outside the scope of preventive measures,” the FATF said. “There are doubts on the dissuasiveness of the penalty provisions.

The country has about 175,000 businesses in the sector but just 9,500 are registered with the Gem and Jewellery Export Promotion Council, which verifies proof of identity, FATF said in the India’s mutual evaluation report released on September 19.