India’s Foreign Contribution (Regulation) Act was introduced in 1976, during the Emergency, to regulate foreign influence in Indian political life. The 2010 Act replaced that framework with a broader system for regulating foreign contributions to organisations and associations. Over time, FCRA has also given the state increasing power over whether organisations can access foreign funding and continue their work. The latest changes take that process further.
The Foreign Contribution (Regulation) Amendment Bill, 2026 was introduced in the Lok Sabha on 25 March and referred to a Joint Parliamentary Committee on 12 August. It is not law yet. The 2026 Rules, however, are already in force. Together, they significantly tighten the conditions under which organisations receiving foreign contributions can operate.
The Bill proposes a Designated Authority to supervise foreign contributions and assets after an organisation’s FCRA registration is cancelled, surrendered, expires or is not renewed. The Authority can take provisional custody of the foreign contribution and relevant assets. If the registration is not restored or renewed within the prescribed period, the assets can vest permanently in the Authority and subsequently be transferred or disposed of, with the proceeds going to the Consolidated Fund of India. The proposed framework also covers assets created partly from foreign contributions.
There is an important detail here. The principle of asset vesting is not entirely new. Section 15 of the existing FCRA already provides for the vesting of assets created out of foreign contribution when an organisation’s registration is cancelled or surrendered. What the 2026 Bill does is build a much more elaborate administrative machinery around that principle, giving the state greater control over what happens to those assets. And this matters because the state already has considerable power to make an organisation incapable of functioning long before anyone arrives to take possession of its assets.
The state does not need to seize an organisation’s property to make it unviable. The cancellation or non-renewal of an FCRA registration can cut off its access to foreign funding, while investigations and regulatory proceedings can tie up its finances and consume the administrative capacity needed to keep the organisation running. By the time an organisation is able to challenge such action, it may already have lost the ability to function as it once did.
The 2020 amendments established much of the architecture that made this possible. The ceiling on administrative expenditure was reduced from 50% to 20% of foreign contributions. That expenditure includes basic organisational costs such as personnel, salaries, travel and management. At the same time, organisations receiving foreign contributions were prohibited from transferring those funds to other organisations, effectively ending the sub-granting arrangements through which larger organisations had supported smaller grassroots groups.
The consequences for smaller organisations were particularly severe. A national organisation could previously receive foreign funding and pass some of it to a local group working in a remote district. After 2020, that channel was closed. The local organisation had to deal with the compliance burden itself, even when it lacked the staff, money or administrative capacity to do so.
The 2020 amendments also required foreign contributions to be received through an FCRA account at the State Bank of India’s New Delhi Main Branch on Sansad Marg. For organisations working in rural areas or distant states, even a basic banking requirement became another layer of centralised administrative control.
This has happened alongside a dramatic contraction in the number of active FCRA organisations. Thousands of registrations have been cancelled or allowed to lapse over the years. Organisations including Amnesty International India, Oxfam India and the Centre for Policy Research have faced cancellation, suspension or non-renewal.
The 2026 Rules add further conditions. Organisations must now identify the purposes for which they intend to use foreign contributions and the states or Union Territories in which they intend to operate. Their FCRA registration is consequently tied more closely to specified purposes and geographical areas. The Rules also expand disclosure requirements concerning activities, office bearers, publications and social media accounts. An organisation must demonstrate that it has undertaken “reasonable activity” by utilising at least ₹10 lakh in foreign contribution over the preceding two financial years. For organisations receiving foreign contributions in instalments under prior permission, the release of a subsequent instalment is tied to utilisation of at least 75% of the previous instalment and a field inquiry.
These requirements are presented as compliance measures. But compliance itself is a mechanism of control where the state has the power to decide whether an organisation has done enough, worked in the right place, spent enough money or remained within the purposes recorded on its certificate.
This is particularly useful to a government that wants to curb progressive work while abandoning its own responsibilities to the people. Organisations working with communities affected by caste violence, displacement, environmental destruction, poverty and state violence can be weakened through the same machinery that is supposed to regulate their funding. The state retreats from its public obligations while strengthening its ability to constrain those who organise in the spaces it leaves behind.
The implications extend beyond organisations conventionally described as NGOs into spaces that are squarely political. Civil society includes legal aid groups, research institutions, health organisations, women’s collectives, workers’ organisations, environmental groups, educational initiatives and organisations working with Dalit, Adivasi and minority communities. These institutions document violence, gather evidence, challenge government policy and provide services where state institutions are inaccessible or inadequate.
It also includes religious and minority institutions. The government has stressed that the 2026 Rules continue to permit specified faith-based welfare and religious activities, including religious education, maintenance of places of worship and charitable work. At the same time, the Rules place foreign-funded activities within increasingly specific categories and exclude proselytisation from the permissible religious purposes.
This is pertinent in a country where schools, hospitals, shelters and charitable institutions are run by religious and minority organisations, especially in a context where successive governments have failed to carry out their public and institutional duties effectively. Why should the state possess such extensive administrative power over institutions that provide social services while it fails to do the bare minimum?
As Azam Khan writes in Maktoob, the changes represent “a systematic attempt to control and subjugate the social fabric of India.” An independent organisation that researches caste violence, documents environmental destruction, provides legal aid to workers or challenges a government policy creates an institutional space from which the state can be questioned. That space matters precisely because it exists outside direct government control.
The history of FCRA shows how this power has accumulated. A law introduced to regulate foreign political influence has become a mechanism through which the state can determine which organisations receive foreign resources and how long they are allowed to operate with them. The 2020 amendments tightened the financial conditions. The 2026 Rules add further administrative requirements. The 2026 Bill extends state control to what can happen to an organisation’s assets after its FCRA registration ends.
The result is a civil society whose institutional survival is increasingly placed in the hands of the executive. Independent institutions create space for people to organise outside the state and produce knowledge that can challenge official accounts. When those institutions are weakened, the communities that depend on them lose some of their capacity to make their experiences visible and press their demands. And when that space shrinks, so does the space available for dissent.
DalitThinkerToday is a Chartered Accountant by profession from Sangli, Maharashtra, who occasionally dabbles in thinking about politics when people in her oppressor-caste-majority office frustrate her. This is her pseudonym.