The Foreign Contribution (Regulation) Amendment Bill, 2026 has opened a can of worms. Through the legislation introduced in the Lok Sabha on Wednesday, the government seeks to tighten the regulatory framework governing foreign funding of non-profit organisations in India. It argues that the proposed amendments would plug operational and legal gaps in the Foreign Contribution (Regulation) Act, 2010.
One of the most contentious provisions of the Bill is the proposal to grant the Union government—through a designated authority—the power to take control of assets created from foreign contributions by NGOs whose licences have been cancelled or suspended. This authority would be empowered to manage, use, transfer, or even dispose of such assets for ‘public purposes’.
The Bill also proposes stricter compliance requirements during periods of suspension. Organisations would be barred from transferring or disposing of assets created from foreign funds without prior government approval, significantly curtailing their operational autonomy. In effect, the Union government would gain sweeping powers over the functioning of NGOs receiving foreign funds. By mandating that state governments must seek the Centre’s prior approval for initiating any FCRA-related investigation, it skews federalism.
These stringent provisions have not gone down well with the civil society groups, who argue that the proposed law could bar or impair NGOs working to promote human and other rights in the country. Their primary concern is the sweeping and disproportionate powers being conferred on the central executive. Politicians have also contended that Parliament risks diluting the existing framework while handing substantive decision-making authority to the government through subordinate legislation.
India has over 15,000 NGOs registered under the FCRA, receiving around `22,000 crore in foreign funds annually. While the government’s concerns about the misuse of funds at the behest of vested interests may carry some weight, the sweeping powers to take control of NGO assets—including those created out of domestic funds—have rightly raised alarm. There is also concern that such provisions could be misused to target institutions that raise uncomfortable questions for the government. There are numerous instances down the decades to suggest that once such a statute is enacted, governments tend to use it to silence sections of civil society. The Bill must be revised to incorporate adequate safeguards against any potential witch-hunt.