The Enemy Property (Amendment And Validation) Act was passed in March' 2017. It is an amendment to the existing Enemy Property Act of 1968. Over the course of five decades the definition of 'Enemy' and 'Enemy Property' has changed. This amendment allows the State to confiscate the property held by the citizens of India whose ancestors may have migrated to Pakistan or China. The motivation for seizure of property from the citizens of India lise in the nationalism wave of the current government. The paper will highlight the changing status of Muslims in India since partition. Second, it will examine change in definitions of Enemy and Enemy property through legal analysis. Third, it will investigate the rationale for the recent amendment and economically analyze the outcome of such a move. New Institutional Economics will be invoked to understand such an action by the State. Fourth, the paper will determine whether the State aims at minimizing the transaction cost and attain neo-classical efficiency or rather attempt to favor certain interest groups