The Legalisation of Foreign Political Financing: Who Really Funds Democracy?

On 15 February 2024, India's Supreme Court delivered one of the most consequential rulings on political finance anywhere in the democratic world, declaring the Electoral Bonds Scheme unconstitutional and manifestly arbitrary. The scheme, introduced in 2017, had allowed individuals and companies to donate to political parties through anonymous bearer instruments, and a parallel change to the law governing foreign contributions meant that money from foreign-owned companies could flow into it without being classified as foreign at all. The ruling forced open, for the first time, a real picture of who had been funding Indian democracy, and it raised a wider question that reaches far beyond India: when a country writes rules that formally prohibit foreign money in elections while leaving the door open to it in practice, has that country actually banned foreign influence, or has it merely legalised it under a different name?