ED busts ‘drugs for goods’ network, says Myanmar suppliers paid through fuel, food

During two-three days of probe, we have uncovered a further modus operandi where drug money was not only being remitted through hawala in Mizoram but it was also converted into marketable goods

The Enforcement Directorate (ED) has unearthed a unique modus operandi where the drug syndicates on the Indian side of the border settle payments with Myanmar-based suppliers by purchasing ordinary, commercially marketable goods like - petrol and diesel, wheat flour, edible oil, groceries, medicines, footwear and clothing - and then send the products across, the agency officials said on Tuesday.

The settlement of payments in “kind” ensures that money doesn’t cross the border. (HT file photo)

The settlement of payments in “kind” ensures that money doesn’t cross the border.

The findings have been uncovered as part of ED’s investigation into the October 23 multi-agency crackdown under ‘Operation Trident’, in which raids were conducted at 38 locations in Assam, Mizoram, and Manipur on a connected international narco-cartel.

During the operation, agencies including ED, Narcotics Control Bureau (NCB) and Mizoram police revealed ₹100 crore worth of hawala transactions, froze 1,424 bank accounts, attached properties worth ₹22 crore, seized 500 detonators and ₹12 lakh in cash, besides arresting 18 people.

ED had said on October 25 that the drugs that leave this corridor in north east are sold for cash across Manipur, Assam, Tripura and in other parts of India “with the cash moved through hawala, and the sale proceeds have to be gathered up and sent back to the suppliers in Myanmar”.

“During two-three days of probe, we have uncovered a further modus operandi where the drug money was not only being remitted through hawala in Mizoram but it was also converted into ordinary, commercially marketable goods – petrol and diesel, wheat flour, edible oil, groceries, medicines, footwear and clothing – and then sent to Aizawl and the border towns of Mizoram and onward into Myanmar,” said a senior ED officer, who didn’t want to be named.

“The drug suppliers across the border are thus being paid in kind, and the dues for the drugs are settled without any money crossing the border,” the officer added.

Further elaborating the modus operandi, a second officer said the settlement of drug dues runs in five steps.

“First, drugs sourced from Myanmar are sold for cash in Churachandpur, Champhai and other towns of Manipur and Mizoram. The cash is gathered by syndicate operatives and handed over to cash handlers or deposited into bank accounts provided by hawala operators”.

In the next step, the cash is placed into the banking system through mini-ATM or customer service provider (CSP) counters at Churachandpur, or through mule accounts in Mizoram, the second officer added. This, he said, is done “on the instructions of Myanmar-based money exchangers”.

“The money is then transferred by RTGS, NEFT or IMPC straight into the bank accounts of genuine suppliers of goods – petrol pumps, flour mills, grocery wholesalers, medicine wholesalers, footwear and cloth traders – in Mizoram, Assam, West Bengal and Delhi,” the officer said.

In the fourth step, the suppliers raise GST invoices and e-way bills on a different buyer – usually a trader in Aizawl or in a border town such as Champhai, Zorinpui, Tlabung or Siaha – or sell in bulk to unidentified persons, and deliver the goods there, a third officer said. “The person who pays is never the person who takes the goods,” he added.

Then finally, the goods are moved from the border towns into Myanmar and sold in Myanmar Kyat.

“The Kyat proceeds are used to settle the dues of the drug suppliers instead of paying in cash,” the third officer added.

“The banking system is thus used only for the Indian leg of the transaction, where the payment looks like an ordinary trade payment backed by a genuine GST invoice and e-way bill. The cross-border leg moves as goods and leaves no money trail at all. In effect, fuel, flour and groceries have become the currency in which Myanmar-based drug suppliers are paid,” he added.

Earlier, on October 25, ED had said that one single company had made 2,947 transfers worth ₹175.03 crore between 2024 and 2026 to mule accounts in Mizoram and settled with Myanmar through unlicensed Rupee–Kyat exchangers in Champhai.

“The latest findings show a parallel channel that bypasses the exchangers altogether: by paying legitimate Indian suppliers and diverting the goods across the border, the syndicate launders the drug cash into a GST-compliant trade payment, turns the goods themselves into the means of settling with Myanmar, and leaves no remittance, hawala entry or currency exchange for investigators to trace,” said the first officer.

Investigation is in progress, he said, to identify the consignees in the border towns, the persons who moved the goods across the border, the Myanmar-based recipients of the goods, the other petrol pumps, shops and suppliers paid in the same manner and the money exchangers directing the accounts, and to trace and attach further proceeds of crime.