Financial Action Task Force (FATF), a global watchdog for money laundering and terrorist financing, released its Comprehensive Update on Terrorist Financing Risks, revealing that the perpetrators of the February 14, 2019, Pulwama terror attack used an e-commerce platform, Amazon, to procure aluminium powder, a key component of the improvised explosive device (IED) that killed 40 Central Reserve Police Force (CRPF) personnel. The report, covered by The Indian Express, The Economic Times, The Hindu, and Times of India, highlighted how terrorists exploited digital platforms and virtual private networks (VPNs) to mask their identities, exposing critical vulnerabilities in India’s digital governance framework. Described as a “wake-up call” by The Economic Times, the incident has reignited debates over intermediary liability, the need to reform Section 79 of the Information Technology (IT) Act, and the balance between user privacy and national security. This article examines the Pulwama case, its implications for India’s digital ecosystem, and the urgent reforms needed to secure the nation’s growing digital economy.
The Pulwama Attack and E-Commerce Misuse
The Pulwama attack, one of the deadliest terror strikes in Jammu and Kashmir, occurred when a suicide bomber, Adil Ahmad Dar, rammed an explosive-laden vehicle into a CRPF convoy, killing 40 personnel. Investigations by the National Investigation Agency (NIA) confirmed that the attack was orchestrated by the Pakistan-based terror group Jaish-e-Mohammed (JeM). A key finding, detailed in the FATF report, was that aluminium powder, used to enhance the IED’s blast impact, was procured through Amazon’s e-commerce platform and online marketplace (EPOM). The NIA’s 13,500-page chargesheet, filed on August 25, 2020, identified 19 accused, including JeM chief Masood Azhar and local operative Waiz-ul-Islam, who used his Amazon account to purchase chemicals, batteries, and other accessories for the IED under instructions from Pakistani handlers.
The FATF report noted that the cross-border movement of a large quantity of explosives into India was facilitated by digital platforms, with terrorists leveraging the anonymity of VPNs to conceal their activities. The use of Amazon’s platform was not an isolated incident; the report also cited the 2022 Gorakhnath Temple attack, where the accused used PayPal and VPNs to transfer ₹6.69 lakh abroad for terror financing. These cases underscore the growing trend of terrorists exploiting e-commerce platforms and online payment systems to procure materials, move funds, and evade detection, posing a significant challenge to India’s national security.
Digital Governance Gaps
The revelation that terrorists used a global e-commerce platform to procure materials for the Pulwama attack has exposed critical gaps in India’s digital governance framework, particularly under Section 79 of the IT Act, 2000. This section grants “safe harbour” immunity to digital intermediaries, exempting them from liability for third-party content unless they fail to remove unlawful material upon receiving a takedown notice from law enforcement. The Economic Times commentary on July 18, 2025, argued that this blanket immunity is outdated, especially as India aims to become a $10 trillion digital economy. The Pulwama case highlights several issues:
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Lack of Proactive Oversight: E-commerce platforms like Amazon are not required to conduct stringent Know Your Customer (KYC) checks for sellers of sensitive goods like chemicals, allowing terrorists to exploit lax verification processes.
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Anonymity Through VPNs: The use of VPNs to mask identities complicates tracking and investigation, as terrorists can operate under pseudonyms or fake accounts.
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Delayed Law Enforcement Response: The reliance on takedown notices means platforms act reactively, only after authorities identify illicit transactions, which is often too late to prevent attacks.
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Supply Chain Vulnerabilities: The FATF report noted that terrorists use e-commerce platforms to procure equipment, weapons, chemicals, and even 3D-printing materials, exploiting global supply chains for terror financing through trade-based money laundering schemes.
These gaps are particularly alarming given India’s rapid digital growth, with e-commerce sales projected to reach $200 billion by 2026. The misuse of platforms like Amazon, coupled with the absence of robust regulatory mechanisms, threatens both national security and public trust in digital marketplaces.
FATF’s Findings and Global Context
The FATF’s 2025 report, co-led by France and supported by the United Nations Counter-Terrorism Executive Directorate (UN CTED), analyzed data from over 80 jurisdictions and 840 submissions from private sectors, academia, and think-tanks. It highlighted the increasing sophistication of terrorist financing through digital tools, including:
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E-Commerce Platforms: Terrorists use platforms like Amazon to procure materials like aluminium powder, which are not inherently illegal but can be weaponized. The report noted that such platforms are also used to sell items for fundraising, disguising funds through trade-based money laundering.
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Online Payment Services: Services like PayPal offer low-cost, fast, and anonymous fund transfers, as seen in the Gorakhnath Temple case, where 44 international transactions were made.
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State-Sponsored Terrorism: Without naming Pakistan, the FATF acknowledged reports of state sponsorship of terror financing, including direct financial aid, logistical support, and training, aligning with India’s long-standing arguments for placing Pakistan on the FATF grey list.
The report was prompted by recent attacks, including the April 2025 Pahalgam terror strike that killed 26 people, which FATF condemned in June 2025, noting that such attacks rely on financial backing and sophisticated fund-moving mechanisms. The Pulwama case, combined with similar incidents globally, underscores the need for a coordinated international response to regulate digital platforms.
Calls for Reform
The FATF findings have sparked urgent calls for reforming India’s digital governance framework, particularly Section 79 of the IT Act. The Economic Times proposed a tiered regulatory framework that differentiates intermediaries based on size, nature, and risk levels. Key recommendations include:
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Risk-Based KYC: Large e-commerce platforms should implement stringent KYC for sellers of sensitive goods like chemicals, using AI-driven tools to flag suspicious transactions proactively.
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Intermediary Liability: Moving away from blanket immunity, platforms should assume greater responsibility for supply chain integrity, with penalties for non-compliance.
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Data-Sharing Protocols: Balancing user privacy with national security, platforms should establish protocols for sharing data with law enforcement during investigations, addressing VPN-related anonymity.
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Real-Time Monitoring: Platforms should deploy advanced analytics to detect patterns indicative of terror financing, such as bulk purchases of dual-use materials.
Public sentiment on X reflects frustration with the lack of action against platforms like Amazon. A post by @bhauwankhade on July 8, 2025, criticized Indian agencies for ongoing investigations since 2019 without holding Amazon accountable, while @sumitagarwal_IN’s 2022 post highlighted the Confederation of All India Traders (CAIT)’s repeated demands for action. These sentiments underscore the urgency of regulatory reform to prevent further misuse.
Economic and Social Implications
The Pulwama case has far-reaching implications:
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Economic Impact: India’s ambition to become a $10 trillion digital economy by 2030 relies on trust in e-commerce platforms. Unchecked misuse could deter consumers and investors, impacting growth in a sector employing millions. The FATF’s findings also risk India’s international reputation, as failure to address terror financing could affect its FATF compliance ratings.
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Social Impact: The loss of 40 CRPF personnel in Pulwama fueled public outrage and distrust in digital systems. Incidents like the 2024 Hyderabad cyber scam, where fraudsters exploited the Pulwama narrative to extort ₹2 lakh from an IT professional, highlight how such events erode public confidence.
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National Security: The ease of procuring explosives online, as seen in Pulwama, underscores vulnerabilities in India’s digital infrastructure, especially amid rising terror threats like the 2025 Pahalgam attack. Operation Sindoor, which targeted JeM operatives in May 2025, reflects India’s proactive military response, but digital loopholes remain a weak link.
Government and Industry Response
The Indian government has acknowledged the FATF findings, with the NIA intensifying probes into digital terror financing, including the use of Chinese apps, crypto wallets, and the Darknet in cases like the 2024 Rameswaram Café blast. The Ministry of Finance has advocated for stricter e-commerce regulations, while the IT Ministry is reviewing amendments to the IT Act. However, no concrete action against Amazon has been reported, despite the NIA’s 2020 chargesheet implicating Waiz-ul-Islam’s use of the platform.
Amazon has not publicly responded to the FATF report, but the company’s global policies emphasize compliance with local laws and cooperation with law enforcement. The lack of proactive measures, however, has drawn criticism, with The Economic Times arguing that platforms must move beyond reactive takedowns to prevent terror financing.
The Path Forward
To address the digital governance gaps exposed by the Pulwama attack, India must adopt a multi-pronged approach:
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Legislative Reform: Amend Section 79 to introduce risk-based liability for large e-commerce platforms, mandating KYC for high-risk sellers and real-time transaction monitoring.
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Public-Private Collaboration: Establish a task force with e-commerce giants, law enforcement, and cybersecurity experts to develop AI-driven tools for detecting suspicious activities.
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International Cooperation: Work with FATF and global platforms to standardize regulations for e-commerce and payment systems, ensuring cross-border accountability.
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Public Awareness: Educate consumers about secure online practices and encourage reporting of suspicious transactions to mitigate risks.
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Strengthened Enforcement: Fast-track NIA investigations and impose penalties on platforms failing to comply with anti-terror financing measures.
Conclusion
The revelation that Pulwama attackers used Amazon to procure explosives is a stark reminder of the vulnerabilities in India’s digital governance framework. The FATF’s 2025 report, highlighting the misuse of e-commerce platforms and VPNs, serves as a critical wake-up call for reforming Section 79 of the IT Act and strengthening intermediary accountability. As India aspires to lead the global digital economy, closing these gaps is essential to safeguard national security, maintain public trust, and prevent future tragedies. By adopting a proactive, risk-based regulatory approach and fostering collaboration between government, industry, and international bodies, India can transform its digital ecosystem into a resilient and secure foundation for growth, ensuring that platforms like Amazon are not exploited for terror financing.
