MORE THAN A WEEK after the Union tabled the Foreign Contributions (Regulation) Amendment Bill, 2026 (‘the Bill’) in the Lok Sabha, the backlash has been swift and sharp. Critics across the political spectrum, including opposition leaders and Chief Ministers M. K. Stalin and Pinarayi Vijayan, have termed the Bill draconian, with Vijayan even writing to the Prime Minister urging its rollback.
Introduced on March 25, the Bill creates a sweeping new legal framework under which, if an organisation’s FCRA registration is cancelled, surrendered, or not renewed, its foreign funds and assets can be taken over, managed, and even disposed of by a government-appointed ‘designated authority,’ effectively centralising State control over such entities.
Nearly 16,000 associations operate under the FCRA framework, collectively receiving around ₹ 22,000 crore in foreign contributions annually. At the same time, the past fifteen years have already seen an unprecedented contraction of this space, with the government cancelling the licences of over 21,933 NGOs. The amendment therefore cannot be read on its own technocratic terms. Against the backdrop of sustained regulatory tightening the question becomes about the shrinking autonomy and very survival of foreign-funded civil society in India.
Tracing the FCRA regime
The law was first enacted in 1976 during the Emergency under Indira Gandhi, with the stated aim of preventing foreign interference in sovereign Indian affairs. However, its origins were deeply political and it was widely seen as a tool to curb political dissent and restrict opposition parties from accessing foreign funds. As ThePrint’s Editor-in-Chief, Shekhar Gupta notes, the law also went so far as to bar foreign contributions to editors, correspondents, publishers, and even cartoonists. “I think she [Indira Gandhi] was so hurt by what Abu Abraham and RK Laxman were doing to her, that she specifically included cartoonists,” he said.
The 1976 Act came to be repealed with the 2010 UPA overhaul, which expanded the category of prohibited recipients to include media organisations engaged in news and current affairs, introduced a five-year validity period for FCRA registration (replacing the earlier indefinite regime), and required prior permission to be tied to a specific purpose or amount. It also introduced Section 15, enabling the vesting of foreign-funded assets in a prescribed authority upon cancellation or surrender of registration, and imposed a cap on administrative expenditure, initially set at 50 percent.
The 2020 amendments further tightened this regime by mandating that all foreign contributions be routed through a designated SBI account in Delhi, prohibiting the transfer of funds to other entities even if they held valid FCRA licences, requiring Aadhaar identification of key functionaries, and sharply reducing permissible administrative expenses from 50 percent to 20 percent.
These changes, introduced amid limited consultation and during the disruption of the COVID-19 pandemic, were widely contested by civil society organisations. However, in Noel Harper v. Union of India (2022), the Supreme Court upheld the constitutionality of the 2020 amendments. The judgment authored by Justice Khanwillkar read,
“...the theory of possibility of national polity being influenced by foreign contribution is globally recognised. For, foreign contribution can have material impact in the matter of socio- economic structure and polity of the country. The foreign aid can create presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose political ideology. Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence/inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed.”
The proposed 2026 amendment builds on this trajectory, seeking to further expand State control by authorising direct management and disposal of assets of organisations that lose FCRA registration.
What the proposed amendment changes
The Union has framed the Amendment Bill as a necessary corrective. The Statement of Objects and Reasons states that the FCRA, 2010, was designed to ensure that foreign funding does not undermine national interest, however, but that over time, gaps have emerged – particularly in dealing with the assets of organisations whose registration is cancelled, surrendered, or lapsed.
The insertion of a new Chapter IIIA marks one of the most significant changes in the proposed amendment. Under this framework, once an organisation’s FCRA registration is cancelled, surrendered, or expires, its foreign contributions and assets no longer remain with it but vest provisionally in a government- designated authority.
If the organisation does not secure renewal or restoration within the prescribed period, this arrangement becomes permanent. In effect, the State is empowered to step in, take possession of these assets, and even manage the organisation’s activities, where deemed necessary in the public interest. The Bill also allows the government to use, transfer, or dispose of such assets, redirecting for public purposes or sold, with the proceeds credited to the Consolidated Fund of India.
The Bill also introduces automatic cessation of registration where an FCRA certificate will lapse if renewal is not applied for, is refused, or expires. Restrictions are also tightened during the period of suspension, ie, even before cancellation, organisations are prohibited from transferring, selling, or otherwise dealing with assets created from foreign contributions without prior approval from the Central Government.
At the same time, the Bill has reduced the maximum penalty for violations from five years’ imprisonment to one year, or a fine, or both. However, enforcement has been strengthened by widening the scope of who can be held liable. The definition of ‘key functionaries’ has been expanded to include directors, trustees, partners, office-bearers, and others involved in the management of the organisation. This means that for any violation of the Act, all key functionaries can be held liable unless they demonstrate that the offence occurred without their knowledge or despite due diligence.
A further procedural change requires that no investigation can be initiated without prior approval of the Central Government, centralising control over enforcement actions.
The key changes are summarised in the table below for ease of comparison.
Why is the Bill being criticised
The widespread backlash against the Bill is perhaps rooted in how the FCRA regime has been implemented over the years, and in growing concerns about transparency, discretion, and the impact on civil society, particularly organisations linked to minority communities, including Christian missionary groups.
As of March 2026, 21,933 NGOs have lost their licences according to Amnesty International. Grounds for cancellation have ranged widely, from procedural lapses and tax issues to more subjective categories such as ‘anti-development activities,’ ‘undesirable activities,’ or concerns about ‘social or religious harmony. During the 2017 ‘peer review’ at the United Nations Human Rights Council in Geneva, nearly a dozen nations, largely from Europe, raised concerns about the FCRA regime, with the criticism led by the United States and Germany, both of which characterised the Act and its enforcement as “arbitrary.”
Among the organisations that have faced FCRA cancellations or regulatory action are the Catholic Health Association of India, Sonam Wangchuck’s SECMOL, Centre for Policy Research, Jawaharlal Nehru University, Smile Foundation, Jamia Millia Islamia, IIT Kanpur, Amnesty International India, and the Ashoka Foundation, among others which show that enforcement has extended across a wide spectrum of entities, including educational and research institutions, development NGOs, and faith-based organisations. Some cancellations have been clarified or reversed in part, some haven’t.
The cancellation of licences of Greenpeace India and organisations linked to Teesta Setalvad — whose organisation Citizens for Justice and Peace had sought a criminal trial against Modi and other officials over the 2002 Gujarat violence — was justified by the government on grounds of “prejudicially affecting the public interest and economic interest of the State”. However, these organisations were also engaged in environmental activism and human rights litigation, including challenges to State policies and actors.
One major concern is the lack of transparency. Since 2022, the online portal no longer provides NGO-wise details such as registration status or foreign funding received which has raised concerns especially since regulatory decisions directly affect public charitable institutions. Questions by CPI(M) MP John Brittas on FCRA licence cancellations and non-renewals were disallowed in Parliament on the ground that such information is “secret in nature.”
“Are basic parliamentary queries on the number of FCRA licences cancelled, the reasons for denial or non-renewal, and the withdrawal of access to public regulatory data in the website to be treated as classified information? When transparency itself becomes “secret”, accountability becomes the first casualty. One is compelled to ask: what is so confidential about regulatory decisions affecting public charitable institutions that even Parliament is denied access to the information?,” Brittas wrote on X.
The Amendment Bill is particularly significant for Christian missionary organisations, many of which rely on foreign contributions for running schools, hospitals, and welfare programmes. On December 25, 2021, the government had revoked FCRA registration of the Missionaries of Charity – the organisation founded by Mother Teresa. Following public backlash, the decision was reversed, reportedly after the submission of some documents.
Kerala, where elections are imminent and the Christian community forms an important voter base, has seen strong reactions and the Bill has taken political significance. Opposition leaders have framed the Bill as a threat to minority-run institutions, while the government has defended it as a measure to curb misuse of foreign funds.
Union ministers, including Kiren Rijiju, have sought to reassure communities that the law is not aimed at legitimate organisations but at preventing unlawful or “anti-national” use of foreign funds. They argue that the amendments are meant to improve regulation and ensure that foreign contributions are used for welfare purposes.
While the Bill has been postponed for now, MP Shashi Tharoor speaking in Nilambur, pointed to the urgency with which the amendments were being pushed (or passed!) and warned that the Bill could be reintroduced when Parliament reconvenes on the 16th.
