Shadow Economies & State Securities: Hawala As A Tool Of Economic Subversion - A Case Study Of The Khanani Brothers And Their Cinematic Reflection In Dhurandhar
- IJLLR Journal
- Jan 15
- 1 min read
Mayank Upadhyay, Delhi Metropolitan Education, Noida, GGSIPU)
INTRODUCTION
Modern states derive their strength not merely from territorial control or military capability, but from the integrity of their economic and financial systems. Currency stability, regulated capital flows, and institutional oversight together form the backbone of state security. Parallel to this formal structure, however, exists a vast and resilient shadow economy; an informal, unregulated financial universe that operates beyond state scrutiny. Among the most potent instruments sustaining this shadow economy is the hawala system, an informal value transfer mechanism rooted in trust, kinship, and secrecy.
While hawala has historically served benign purposes particularly for migrant communities lacking access to banking it has, in the contemporary geopolitical landscape, evolved into a strategic tool for money laundering, terror financing, sanctions evasion, and economic destabilisation. This article examines hawala not merely as a financial irregularity, but as a mechanism of economic subversion capable of undermining state sovereignty.
Using the Khanani brother’s operators of one of the largest global hawala networks as a central case study, the article analyses how informal finance can be weaponised against national economies. It further evaluates how this reality has entered popular consciousness through its fictionalised depiction in the Hindi film Dhurandhar, thereby illustrating the interaction between law, economics, national security, and cinema.
CONCEPTUAL FRAMEWORK: SHADOW ECONOMIES AND STATE SECURITY
A shadow economy refers to all economic activities that occur outside formal regulation, taxation, and state oversight. Such economies thrive on anonymity, cash transactions, and informal enforcement mechanisms. From a legal perspective, shadow economies challenge the state’s monopoly over legitimate economic activity, weaken fiscal capacity, and erode the rule of law.
