There are various criminal activities that generate money laundering. The traditionally known criminal activities that generate money laundering include drug trafficking, trafficking of women and children, smuggling, counterfeiting, tax evasion, misappropriation of public funds, corruption, bank frauds and so on. Drug trafficking is among one of the major sources of generating money laundering. By most estimates, the traffic in illicit drugs is one of the world’s most substantial money earners and is becoming one of the major sources of generating money laundering. It destroys not only the vitals of the society but also adversely affects the economic growth of the country because this is a trade which generates large unaccounted money which, in turn, leads to adoption of Money Laundering. The money generated is used for various purposes including anti-national and terrorist activities and even clandestine trading in arms and ammunition. Drug trafficking [also referred to as the illegal drugs trade] is one of the largest global businesses, at some $322 billion, according to the UN World Drug Report, 2007 and is a global black market and one of the most serious organized crime problem in the world today. It attracts criminal organizations because the potential profits are significantly more than from other criminal commodities. The UN report said the global drug trade generated an estimated $400 billion in 2008.Proceeds of drug related crimes are an important source of money laundering world over. The drug trafficking is a significant concern as it poses a problem both at national as well as at international security on several fronts. It is used as a financier and facilitator of terrorist activity sponsored by neighbours. The drug trade has spawned large money laundering networks as a drain on the national economy. It threatens society by enhancing criminal activity. The enemy is very powerful, extremely wealthy and knows no borders. Keeping in view the above facts, therefore, the aim of the present paper is to examine the particular lucrative crime of drug trafficking as a global criminal activity which generate money laundering, its modus operandi of concealing the generated money, its impact, and to highlight its magnitude in India with special reference to searches and seizures.