ISI sponsoring Khalistan networks in North America via drug cartels: Report
Synopsis
Key Takeaways
Pakistan's Inter-Services Intelligence (ISI) is cited in multiple independent assessments as an external sponsor of the Khalistan campaign operating out of North America, allegedly helping establish and sustain drug-cartel networks involving Punjabi-Canadian operators after traditional diaspora donations proved insufficient to fund desired levels of activity, according to a report published in Khalsa Vox.
Scale of the Khalistan Campaign in Canada and the US
The report, authored by Harleen Kaur, argues that the Khalistani extremist movement is not a spontaneous expression of diaspora grievance but a sustained political and organisational enterprise. Sikhs for Justice (SFJ), she notes, has run a multi-year series of non-binding 'referendums' across Canadian and American cities, maintaining legal and advocacy infrastructure, staging regular public events, producing propaganda, and supporting legal defence and lobbying efforts.
'These activities require continuous funding for venues, logistics, materials, personnel, communications, and travel. Many of the people involved entered Canada or the United States as asylum seekers or temporary residents who described themselves as having fled with few resources. The operational scale of the campaign raises a basic question: where does the money come from?' Kaur wrote.
Canadian Government's Own Risk Assessment
The report cites Canada's Department of Finance 2025 Assessment of Money Laundering and Terrorist Financing Risks, which states that Babbar Khalsa International and the International Sikh Youth Federation — both listed terrorist entities under the Criminal Code in the Politically Motivated Violent Extremism category — have been observed by law enforcement and intelligence agencies to receive financial support originating from Canada.
According to the assessment, these groups are suspected of raising funds in Canada and elsewhere through documented methods including soliciting diaspora donations, abuse of non-profit and charitable organisations, cryptocurrencies, and criminal activity. The Canadian Security Intelligence Service (CSIS) has separately confirmed that a subset of Canada-based Khalistani extremists continues to use the country as a base for the promotion, fundraising, or planning of violence primarily in India.
Drug Trafficking and the Money Trail
The report identifies illegal drug trafficking as the highest money-laundering threat in Canada, involving billions of dollars annually. A subset of Punjabi-Canadian organised crime groups has, according to the report, long controlled significant portions of the cocaine, methamphetamine, and fentanyl trade moving through Western Canada and Ontario's trucking corridors.
Since 2007, more than 200 gang-related homicides in British Columbia alone have been linked to rival Punjabi-Canadian gangs contesting that trade, the report notes. Trucking companies have reportedly served as cover for bulk shipments, with major seizures — including hundreds of kilogrammes of cocaine in Peel Region — involving Indo-Canadian suspects.
Notably, in at least one reported case, financial intelligence allegedly traced tens of thousands of dollars from a raided drug house to a registered Canadian charity associated with pro-Khalistan causes. Indian investigators and Canadian law-enforcement sources have reportedly flagged that a portion of drug revenues is being diverted toward diaspora political campaigns, legal defence funds, and organisational support.
ISI Reassessing Spending as Punjab Support Wanes
Citing recent intelligence inputs, Kaur wrote that the ISI is reportedly reassessing its spending as grassroots support for Khalistan weakens on the ground in Punjab and some former backers distance themselves from what they describe as a criminal syndicate involved in drugs, arms trafficking, and extortion.
High-profile figures involved in organising the so-called referendums have faced firearms charges, the report adds — characterising these as patterns repeatedly observed by Canadian police and intelligence agencies, not abstract concerns.
What the Report Recommends
The report calls on Canadian law enforcement and intelligence agencies to treat the financing of the Khalistan campaign as a national security priority requiring rigorous, evidence-based scrutiny. It urges authorities to follow the specific money sustaining SFJ referendums, legal efforts, propaganda, and organisational infrastructure through financial intelligence analysis, charity audits, and proceeds-of-crime investigations. How Canadian authorities respond to these recommendations is likely to shape the trajectory of India-Canada security cooperation in the months ahead.