Narayanan has a long history of dealings with the Tamil Tigers of Sri Lanka

In a speech to the 43rd Munich Conference on Security Policy, Indian National Security Advicer M. K. Narayanan said different organisations indulging in terrorism raise their funding through legal and illegal means.

He say that extortion remains to be one of the main methods of fund raising for organisations
such as the Tamil Tigers. "Extortion and use of coercive methods: Many terrorist outfits today imitate criminal enterprises. Intimidation of small businesses, individuals and even some State enterprises to extort funds has become common".

Legitimate Businesses

M. K. Narayanan say legitimate businesses run by these organisations raise money for them in many parts of the world. "Utilisation of legitimate business enterprises: Terrorist outfits set up legitimate business enterprises viz. restaurants, real estate, shipping, etc. and utilize part of the proceeds to siphon off funds for terrorist activities".

He says Tamil Tigers in particular are well established in maintaining business enterprise. "Among terrorist outfits, the LTTE has a very well-established network of legitimate businesses, which provide both funds as well as logistics for their activities. Jehadi terrorist organizations have begun to follow suit".

Even stock markets are not immune from these organisations says M. K. Narayanan "Stock market operations: Isolated instances of terrorist outfits manipulating the stock markets to raise funds for their operations have been reported. Stock Exchanges in Mumbai and Chennai (India) have, on occasions, reported that fictitious or notional companies were engaging in stock-market operations. Some of these companies were later traced to terrorist outfits".

Drug trafficking

He says that the LTTE is relying heavily on funds raised by drug trafficking "Funds from drug cultivation and trafficking in narcotics are extensively used to fund terrorist outfits. Both jehadi outfits and the LTTE rely heavily on such funds for their activities".

According to Indian Agencies at least 1/8th of their major interdictions reveal a drugs- terrorist nexus.