The proposed FCRA Amendment Bill, 2026 has raised concerns among NGOs, religious organisations, charitable institutions and other stakeholders. A major issue is the proposed power of the Designated Authority to take control of assets created wholly or partly from foreign contributions, potentially affecting assets acquired years earlier for schools, hospitals and other charitable purposes. Critics are particularly concerned about mixed-funded assets and the possibility that vested assets could eventually be transferred or sold, with proceeds going to the Consolidated Fund of India.
Another concern is the Bill’s possible retrospective effect, especially when organisations stop renewing their FCRA registration. Stakeholders also worry that delays or technical problems in registration renewal could disrupt legitimate organisations. Questions have been raised about the absence of a clear statutory appeal process and adequate opportunity to be heard when renewal is refused. Finally, critics argue that broad administrative discretion and detailed requirements imposed through rules could create uncertainty and make compliance difficult for smaller organisations. The Bill was introduced in the Lok Sabha on March 25, 2026, and referred to a Joint Parliamentary Committee (JPC) on August 12 for examination. Here, we examine the key amendments proposed in the Bill and their potential implications.
Can an organisation challenge an order of the Designated Authority?
Yes. An organisation aggrieved by an order of the Designated Authority may seek revision within 90 days. The Bill also provides for an appeal to the court of the District Judge.
However, the Act and the Bill do not provide a specific appeal mechanism against the Central government’s decision to refuse renewal of an FCRA certificate. This is one of the concerns raised by critics of the proposed framework.
What happens to organisations that do not renew their FCRA registration?
This is one of the most significant changes proposed by the Bill. At present, an organisation may choose not to continue with FCRA registration. The Bill proposes that cessation of the certificate, including through non-renewal, can trigger the vesting of foreign-funded assets.
This could have implications even for an organisation that is otherwise functioning lawfully but decides that it no longer wants to receive foreign contribution.
What are the concerns about asset control and the Consolidated Fund of India?
The first concern is that the Bill gives a Designated Authority powers to take provisional and, in certain circumstances, permanent control of assets bought or created wholly or partly with foreign funds.
Critics argue that this could affect assets created years earlier with legitimate foreign contributions. An organisation that no longer wants to receive foreign funds may still hold such assets for schools, hospitals, offices or other charitable purposes.
Concerns have also been raised about mixed-funded assets, where both Indian and foreign contributions have been used. Establishing precisely what portion of an asset was created from foreign contribution could lead to disputes.
There is also concern that permanently vested assets may ultimately be transferred or sold and the proceeds credited to the Consolidated Fund of India.
What are the concerns about the possible retrospective effect?
A key concern is that the proposed asset provisions could affect assets created from foreign contributions in the past.
An organisation may have received foreign funds and created an asset when it had a valid FCRA certificate, but later decide not to renew its registration. Under the proposed framework, the cessation of the certificate could trigger vesting of the asset.
Critics therefore argue that the provision could make it difficult for an organisation to exit the FCRA system without potentially losing control over assets created with foreign funds.
What are the issues with renewal, denial of registration and appeals?
Delays in renewing registration could cause serious problems for organisations. A genuine NGO could be unable to receive or use foreign funds because of a delay, a technical mistake or a paperwork issue, even if it has not deliberately violated the law.
There is also no specific requirement in the Act for the Central government to give an organisation an opportunity to be heard before refusing renewal. Nor is there a specific statutory appeal mechanism against such refusal.
An organisation may approach a court in appropriate circumstances, but litigation can take time and cost money. During this period, the organisation’s work, finances and the people it helps could suffer.
How much discretion will the authorities have under the new framework?
Several parts of the framework will depend on rules or decisions made by the authorities.
The amended Rules, for example, specify 105 permitted purposes and require organisations to identify the States/UTs where they propose to work. They also define “reasonable activity” by reference to utilisation of at least ₹10 lakh in foreign contribution over two financial years.
Critics have questioned whether some of these requirements go beyond what can appropriately be prescribed through delegated legislation, particularly when failure to comply can affect an organisation’s registration.
What could change for trustees and other office-bearers?
The Bill introduces a detailed definition of “key functionaries”. It covers directors of companies, partners in firms, trustees, the Karta of a Hindu Undivided Family and office-bearers or members of governing bodies, managing committees and other persons responsible for management.
A key functionary may be presumed responsible for an offence committed by an organisation unless he or she establishes that the offence was committed without his or her knowledge or that due diligence was exercised.
The Bill also places a duty on the last key functionaries to inform the Central government if an organisation ceases to exist or becomes defunct.
This could increase the legal and compliance responsibilities of trustees and other office-bearers.
What happens if an organisation is considered “defunct”?
The existing Act permits cancellation of registration where an organisation has become defunct or has not undertaken reasonable activity for the benefit of society in its chosen field for two consecutive years.
The Bill provides additional consequences where an organisation ceases to exist or becomes defunct. It also places a duty on the last key functionaries to notify the government.
The amended Rules, meanwhile, define reasonable activity as utilisation of at least ₹10 lakh in foreign contribution during the previous two financial years for the permitted purpose.
What happens to organisations using the prior-permission route?
Organisations that do not have FCRA registration can receive foreign contribution through prior permission from the Central government for a specified source, amount and purpose.
The Bill proposes that foreign contribution received under the prior-permission route must be received and utilised within a period to be prescribed.
The amended Rules also provide that an organisation seeking the second or subsequent instalment under prior permission must have utilised at least 75 per cent of the previous instalment. A field inquiry into such utilisation is also required before the subsequent instalment is released.
Can foreign funds remain unused?
Yes. Foreign funds may remain unused for legitimate reasons. Delays can occur because of government approvals, natural disasters, supply problems or court cases.
However, the organisation remains subject to FCRA requirements regarding utilisation, reporting and compliance. The new utilisation-related requirements could create additional difficulties for organisations whose projects are delayed.
Are there restrictions on foreign nationals holding key positions?
Yes. The amended Rules provide that an organisation having foreign nationals, other than persons of Indian origin, as key functionaries will not ordinarily be eligible for FCRA registration.
The government may, however, specify circumstances in which such an organisation may be permitted to register.
How could the changes affect foreign donors and those running organisations?
Stricter rules on foreign funds, reporting and assets could make some foreign donors less willing to support Indian charities.
They could also make some professionals hesitant to serve as trustees or office-bearers because of increased compliance responsibilities and potential legal and reputational risks.
For smaller organisations in particular, the cost of meeting additional reporting and documentation requirements could be significant.
What happened in August 2026 in the case involving two NGOs and the Vizhinjam Seaport project?
Two Kerala-based NGOs — Kerala Social Service Forum and Save A Family Plan India — challenged the Centre’s refusal to renew their FCRA certificates. The Centre had relied on a report of a Central security agency alleging links to financial support for protests against the Vizhinjam Seaport project.
On August 11, the Kerala High Court set aside the Centre’s orders. The court found that the material relied upon did not establish a direct or indirect financial link between the organisations and the protesters. It also held that peaceful protest against a development project is a constitutionally protected activity and cannot, without evidence of wrongdoing, be treated as an undesirable purpose or contrary to public interest.
The judgment is significant in the context of concerns over the discretion available to authorities while deciding FCRA renewal applications.
How many FCRA registrations have been cancelled, expired or remained valid?
According to the FCRA portal, as of July 15, 2026, there were 14,449 active FCRA certificates, 22,498 cancelled certificates and 15,212 certificates that had expired. The figures can change as the portal is updated.
The MHA data cited in recent discussions has also shown substantial numbers of registrations that have been cancelled or have expired, underlining the scale of the FCRA compliance system.
What has the Kerala Catholic Bishops’ Council said about the amendments?
According to Fr Michael Pulickal, secretary, Jagratha Commission, Kerala Catholic Bishops’ Council (KCBC), several provisions are anti-democratic and could affect fundamental rights and freedom of expression.
He said provisions relating to religious conversion could be misused and might affect the freedom of religion guaranteed by the Constitution.
He also said that during a recent meeting between a church delegation and Union Home Minister Amit Shah, officials dealing with FCRA Rules were present. He claimed that the meeting showed that there was insufficient clarity among officials on several provisions of the Act.
What does the Union government say about foreign donations and the proposed changes?
The Centre says FCRA does not prohibit Indians from receiving foreign donations or seek to shut down law-abiding civil society organisations.
The government maintains that large numbers of associations remain validly registered and receive foreign funds for health, education, disaster relief, research and humanitarian work.
It argues that the 2026 changes address operational gaps that have emerged in the administration of the Act and build on the regulatory framework that has existed since 2010.
Have individual voices in Kerala reacted to the proposed changes?
Yes. One prominent voice is Babu Abraham Kallivayalil, member of the national council of the Institute of Chartered Accountants of India.
In his writings, he has expressed concern that mistakes in following the rules, delays in renewal, suspension of registration or an adverse classification could make it difficult for organisations to receive or use foreign funds. In some cases, he has argued, this could also affect their control over assets bought or created with legitimate foreign donations.
Do other countries have similar regulations?
Yes. Many countries have laws and regulations dealing with foreign funding, lobbying and foreign influence, although these frameworks differ considerably from India’s FCRA.
The United States has the Foreign Agents Registration Act (FARA). Australia has the Foreign Influence Transparency Scheme Act. The United Kingdom has the Foreign Influence Registration Scheme under the National Security Act, 2023.
The European Union has also proposed legislation aimed at increasing transparency around organisations representing the interests of foreign governments.
Canada has legislation dealing with foreign influence and transparency, including the Foreign Influence Transparency and Accountability Act, 2024.
These laws do not operate in exactly the same way as FCRA and regulate different aspects of foreign funding or influence.
What is the present status of the Bill and the Rules?
The Foreign Contribution (Regulation) Amendment Bill, 2026, was introduced in the Lok Sabha on March 25, 2026. It was referred to a Joint Parliamentary Committee on August 12 for detailed examination and is still under consideration.
The Foreign Contribution (Regulation) Amendment Rules, 2026, were notified by the Ministry of Home Affairs on June 22, 2026, and are in force.
The distinction is important: the Bill is still only a proposal, while the amended Rules are already in operation.
(This is the concluding section of a two-part explainer series on this topic started on 24 August, Monday)