Blitz India Business
The Union Government has tightened the rules governing foreign funding received by non-Government organisations (NGOs) and associations under the Foreign Contribution (Regulation) Act (FCRA), 2010. The latest amendments, notified in June, require greater disclosure from organisations, including details of social media accounts, approved activities and geographical areas of operation, according to a report in The New Indian Express.
The changes come a few months after the introduction of the Foreign Contribution (Regulation) Amendment Bill, 2026 in Parliament, which proposed significant changes to the management of foreign-funded assets but was subsequently stalled amid political opposition and criticism from civil society groups. The FCRA framework is now back in focus, reviving a long-running debate over transparency, national security, foreign funding and the autonomy of voluntary organisations.
Tenth revision of rules
The amendments are the tenth revision of the rules framed under FCRA, 2010 since the principal rules were notified in 2011. The Government says the objective is to improve transparency, accountability and traceability in the receipt and utilisation of foreign contributions.
The amended rules require organisations to choose their objectives from a predefined list of purposes and specify the States and Union Territories where they intend to operate. These approved purposes fall under categories such as religious, educational, cultural, economic and social activities.
The rules require annual returns to include detailed activity reports along with financial statements. Organisations receiving funds through intermediary remittance vehicles or donor-advised funding arrangements must disclose the ultimate source of those contributions. The Government has also revised penalties for several violations.
The rules provide that associations having foreign nationals, other than persons of Indian origin, as key functionaries will ordinarily not be considered for registration or prior permission, although exceptions may be granted in specified circumstances.
To prevent inactive entities from retaining licences, organisations seeking renewal are expected to have spent at least Rs 10 lakh of foreign contribution on their approved activities during the previous two financial years.
Changes regarding religious activities
The rules continue to permit a range of faith-based activities, including religious education, the preservation of traditions, and the maintenance of places of worship. However, certain categories are now specifically required to be carried out excluding proselytisation.
This condition applies to activities such as religious instruction, documentation of faith traditions and preservation of indigenous and tribal belief systems. The Government argues that the provision is intended to ensure that foreign contributions are not used for religious conversion-related activities.
The Bill, introduced in the Lok Sabha on March 25, sought to amend the parent Act. Its most significant proposal was the creation of a Government-notified Designated Authority to manage foreign contributions and assets in cases where an organisation’s FCRA registration was cancelled, surrendered, denied renewal or allowed to lapse.
Under the proposal, foreign contributions and assets created from such contributions would temporarily vest in the Authority. The Authority would supervise, maintain and manage them until the organisation either regained registration or ceased to qualify under the law. If registration was restored, the assets and unused funds could be returned. If an organisation failed to secure renewal or fresh registration within a prescribed period, or became defunct, the assets could permanently vest in the Authority and be used for public purposes.
The Bill also proposed expanding restrictions relating to persons engaged in news and current affairs activities, reducing the maximum term of imprisonment for offences under the Act and requiring prior Government approval before the initiation of investigations.
Why did the Bill stall?
The Bill did not proceed to passage and was deferred after attracting opposition from political parties, minority organisations and sections of civil society.
Critics argued that the proposed Designated Authority would enjoy extensive powers over the assets of organisations and could take control of properties because of procedural issues such as delays in renewal. Concerns were also raised about the possibility of minority-run institutions, including educational and charitable establishments, becoming vulnerable to state intervention.
Former Tamil Nadu Chief Minister M K Stalin described the proposal as a “direct attack” on Christian NGOs and minority institutions. Congress President Mallikarjun Kharge said it was “not a reform” but an attack on minorities and civil society organisations. Indian Union Muslim League MP E T Muhammad Basheer termed the proposal “anti-minority and unwarranted”. Church organisations and Catholic groups similarly expressed concern about its possible impact on community-run institutions.
Faced with mounting criticism, the Government deferred discussion on the Bill, which remains pending.
The Government has consistently argued that foreign contributions must remain transparent and traceable. It maintains that stricter regulation is necessary to prevent misuse of funds, ensure compliance with the law and protect national interests.
Union Home Minister Amit Shah has maintained that foreign funding “cannot remain unmonitored” and has said that strong action would be taken against organisations that violate FCRA provisions.
The present debate has its roots in a broader tightening of the FCRA regime since 2015. The Government introduced an online renewal process and increased scrutiny of organisations receiving foreign contributions. This was followed by large-scale cancellations and non-renewals of registrations.
The amendments are the tenth revision of the rules framed under FCRA, 2010 since the principal rules were notified in 2011. The Government says the objective is to improve transparency, accountability and traceability in the receipt and utilisation of foreign contributions.
The tightening gathered pace with the 2020 amendments. These barred the onward transfer of foreign contributions to other NGOs and cut the cap on administrative expenditure from 50 per cent to 20 per cent, changes that supporters said would improve accountability but critics argued would make it harder for smaller organisations to function.
According to official data, more than 22,000 FCRA registrations have been cancelled, over 15,000 have expired and about 14,460 remain active. Supporters view this as evidence of stronger enforcement, while critics see it as a sign of shrinking space for civil society organisations.
In April 2022, the Supreme Court upheld the constitutionality of the 2020 FCRA amendments in Noel Harper v. Union of India. It held that foreign contributions could be regulated in the interests of transparency, accountability and national sovereignty.
The ongoing debate reflects a broader tension between the state’s interest in regulating foreign funding and civil society groups’ concerns about institutional autonomy and freedom of association.