FCRA amendments: What the new bill proposes, and why it has sparked pushback

A designated authority to take over assets, a cut in jail terms, and mounting pressure from churches and opposition parties — what the bill entails.

The government is working to build consensus on referring the contentious Foreign Contribution (Regulation) Amendment Bill, 2026, to a joint parliamentary committee (JPC), as opposition parties, church groups and civil society organisations push back against provisions they call draconian.

The Bill was introduced in Lok Sabha on March 25 and still before Parliament. (Reuters File)

Among the key concerns is the plan to empower a “designated authority” to take over, manage or sell assets built with foreign funds by non-governmental organisations (NGOs) whose licences are cancelled, suspended or not renewed.

The bill, introduced in the Lok Sabha on March 25 and still before Parliament, would also extend liability from an NGO’s direct managers to its directors and trustees. It cuts the maximum jail term for violations from five years to one, and fixes timelines for the receipt and utilisation of funds granted under the “prior permission” category.

The Union ministry of home affairs (MHA), which regulates foreign funding for NGOs, says the amendments aim to create “a comprehensive statutory framework for vesting, supervision, management and disposal of foreign contribution and assets through a designated authority, including provisional and permanent vesting”, along with rationalised penalties and mandatory central approval for launching investigations.

As criticism has mounted, MHA clarified on July 22 that the designated authority would manage only assets created from foreign contributions, and only after an organisation’s registration has lawfully ceased.

“Vesting is initially provisional, with full restoration if registration is renewed, and places of worship retain their religious character by law in all cases,” a statement said, adding that the authority’s orders can be revised and appealed before the court of the district judge.

What is FCRA?

The Foreign Contribution (Regulation) Act governs how Indian individuals, associations, NGOs, trusts and companies (only if they get donations) may receive and use money, securities or articles from sources outside the country.

It does three things: identifies who may accept foreign contributions and on what conditions; specifies how the money must be received, accounted for and reported; and restricts a narrow set of foreign-funded activities that could affect India’s sovereignty, security or public order.

The MHA’s foreigners' division is the administrative authority, and the entire process runs on its FCRA portal.

Any organisation seeking foreign contributions must have been operating for at least three years, and can either obtain a five-year FCRA registration or apply for "prior permission" for a specific project.

Both routes require identity verification, disclosure of office-bearers, and a description of proposed activities and how funds will be spent. No more than 20% of annual foreign receipts may be spent on administrative expenses; the remaining must go to the declared purpose. Registration is renewable every five years subject to a fresh government review. If a renewal is not sought, the licence expires automatically.

All foreign contributions must be received in a single designated account at the State Bank of India's Parliament Street branch in Delhi, from where funds can move to operational accounts. Every registered organisation must file an annual Form-C return with an audited statement identifying donors, amounts received and how the money was used.

Under the FCRA law, foreign funds can be used for specific purposes across different fields — education (schools, colleges, vocational training, scholarship support, educational research, libraries, adult literacy programmes), healthcare (hospitals, clinics, mobile health units, maternal and child healthcare, community health education, disability support), rural development (livelihood support, agricultural extension, sanitation, clean water access, housing), social welfare (support for persons with disabilities, elderly care, child welfare, women’s empowerment, rehabilitation programmes), environment (conservation initiatives, afforestation, clean energy, pollution control, wildlife protection, environmental research), culture and heritage (preservation of cultural heritage, folk arts, indigenous knowledge, traditional crafts, museums and archives), relief and rehabilitation (disaster relief, emergency response, post-disaster rehabilitation, resettlement support), faith-based welfare (maintenance of places of worship, religious education, moral instruction, meditation programmes, preservation of faith traditions), and scientific research (research institutions, laboratories, academic collaborations, publication and knowledge dissemination).

A list of individuals — largely unchanged since 1976 — cannot receive foreign contributions under any circumstances: election candidates, legislators, judges, government servants, newspaper editors and publishers engaged in news reporting, and political parties. The rationale is that these categories carry constitutional responsibilities that make foreign funding a matter of particular sensitivity.

How the law has evolved

FCRA was first enacted in 1976, during the Emergency, to regulate foreign contributions and hospitality in a manner consistent with a sovereign, democratic republic. The government’s stand at the time was that foreign entities could influence India’s political processes and institutions.

In 2010, as cross-border financial flows grew more complex, the Congress-led United Progressive Alliance government replaced the 1976 law with a stronger compliance architecture. This meant mandatory renewal of licence every five years, wider powers of inspection, and provisions for suspension, cancellation and compounding of offences.

The Narendra Modi government tightened the law further in 2020, requiring Aadhaar or passport identification for office-bearers, confining foreign receipts to the single SBI account in Delhi, prohibiting sub-granting of funds to other associations, cutting the administrative expenses ceiling from 50% to 20%, and making renewal subject to a government inquiry.

Rules notified the same year classified organisations that engage in bandhs, hartals or rasta roko — even without formal party links — as being of a “political nature”, a category that swept in some farmers’, students’, workers’ groups and caste-based outfits.

The cancellation record

As of Thursday, 22,496 organisations have had their FCRA licences cancelled and another 15,226 are deemed to have expired.

Only 14,434 organisations currently hold a valid registration.

Prominent global organisations to have lost their licences over the last 12 years include Greenpeace Foundation, whose registration was cancelled in 2015 on the grounds that it misused foreign funding for political activities prejudicial to public and economic interests.

Amnesty International India shut its India operations in 2020, and the licences of Oxfam India (2022), the Rajiv Gandhi Foundation (2022) and the Centre for Policy Research (2023) either lapsed or were not renewed after investigations.

These organisations have argued that government action has made it difficult for civil society to function. The government has denied these accusations, maintaining that in specific cases, action followed identified breaches of the law rather than an attempt to curb civil society activities.

The 2026 amendments

The 2026 bill vests assets tied to foreign funds with the designated authority — a move the government says fleshes out a vesting provision that has existed on paper since 2010 but lacked a detailed framework for custody, management or disposal. It also reduces the maximum prison term to one year.

The MHA separately notified FCRA Rules, 2026, on June 22. These permit a range of faith-based activities but explicitly exclude proselytisation, and prohibit associations from having foreign nationals — other than those of Indian origin — as key functionaries.

The pushback

Opposition parties, sections of civil society and religious organisations have argued that the amendments, if cleared, would give the government broad control.

Congress leader Manish Tewari, opposing the bill in March, had said it would “give sweeping power to the executive without any constitutional safeguards”. Trinamool Congress’s Pratima Mondal called it “dangerous and draconian”, warning of a centralisation of authority.

Meghalaya chief minister Conrad Sangma and the Catholic Bishops' Conference of India (CBCI) have each met Union home minister Amit Shah more than once since the bill and rules appeared. A CBCI statement on July 10 warned that some provisions “could affect charitable institutions that have served poor and vulnerable communities for decades”.

On August 4, US Congressman Riley Moore said the amendments would let the Indian government take over churches and religious charities, and could strain bilateral relations.

MHA has pushed back. In its July 22 statement, it said the Act “applies uniformly to all organisations regardless of religion, community or ideology”, and that faith-based welfare — including religious education, upkeep of places of worship and charitable work — remained eligible for foreign funding.

The ministry also pointed to what it called comparable frameworks on foreign funding, lobbying and influence activities in the US, Australia, the UK, Canada and the European Union, arguing that regulation of foreign money is not a uniquely Indian concern.

The JPC route & government outreach

The government, HT reported, is sounding out parties on referring the bill to a JPC, people aware of the matter said. A BJP lawmaker said parliamentary affairs minister Kiren Rijiju is leading the outreach.

Congress and the TMC have so far opposed a JPC referral, while some parties have demanded that the bill be scrapped altogether. Discussions with the Dravida Munnetra Kazhagam (DMK) are ongoing.

The Biju Janata Dal has signalled it is open to a JPC, but is concerned that organisations working in education or healthcare should not be tripped up by administrative procedures.

Last week, DMK MP P Wilson led a delegation of church representatives to Shah with a memorandum seeking JPC scrutiny, arguing that the bill “alters the incidents of ownership of charitable, educational, medical and religious property" nationwide and should not proceed without the fullest pre-legislative examination. The delegation said a JPC was preferable to a department-related standing committee because the subject cuts across ministries.

Separately, Shah assured Mizoram chief minister Lalduhoma that the amendments will not be applied retrospectively.