India’s regulatory framework governing foreign funding for non-governmental organisations underwent a significant tightening in June 2026, reigniting long-standing debates about the balance between national security, financial accountability, and the operational space available to civil society. On 22 June 2026, the Ministry of Home Affairs notified the Foreign Contribution (Regulation) Amendment Rules, 2026, amending the 2011 Rules under the Foreign Contribution (Regulation) Act (FCRA), 2010. These changes apply to nearly 14,500 organisations currently holding FCRA licences and to all future applicants. Existing organisations face a one-year window to align with the new requirements or risk losing the ability to receive and utilise foreign contributions.
The amendments mark a clear shift from a relatively flexible, programme-based approach to a more prescriptive regime. Registration is now purpose-based and geographically restricted. Organisations must select activities from a government-prescribed Schedule of 105 permissible purposes grouped under religious, cultural, economic, educational and social headings. They must also specify the States or Union Territories in which those activities will be carried out. Any change in purpose or geography requires fresh registration and inquiry, accompanied by additional fees. This replaces the earlier open-ended registration model and aims to ensure funds are used only for declared, approved objectives within defined locations.
Alongside purpose and geography restrictions, the rules impose heavier disclosure and compliance obligations. FCRA-registered entities must declare their social media accounts, websites and publications. The definition of key functionaries has been expanded to cover anyone with control over management or affairs. These individuals must disclose publications even when produced in a personal capacity. Ultimate donor identities must be revealed, and field inquiries are mandated before subsequent funding instalments. A minimum utilisation threshold has also been introduced: for renewal, an organisation is deemed to have undertaken “reasonable activity” if it has spent at least ₹10 lakh of foreign contribution over the preceding two financial years. Failure to meet this benchmark can lead to non-renewal or cancellation. Combined with the existing 20 per cent cap on administrative expenses (introduced in 2020), these provisions raise the compliance bar considerably, particularly for smaller and grassroots organisations with limited administrative capacity.
One of the most sensitive aspects of the new rules concerns religious activities. Foreign funds are explicitly barred from use for proselytisation or the religious conversion of Indian citizens. While certain religious activities remain permitted—such as the construction, maintenance and renovation of places of worship, printing and translation of sacred texts, religious education of members provided it does not aim at conversion, assistance to pilgrims, and the preservation of indigenous and tribal religious traditions—the overall framework is far more restrictive than before. Organisations that previously registered under a generic “religious” category must now fit their work into the detailed Schedule. Critics argue this creates uncertainty for faith-based groups, many of which have historically relied on overseas support for educational, healthcare and social service programmes.
These rules sit against a longer history of regulatory tightening. Over the past decade, more than 22,000 FCRA registrations have been cancelled, leaving only about 27.7 per cent of previously registered NGOs active. Parallel to the rules, Parliament is considering the Foreign Contribution (Regulation) Amendment Bill, 2026. Introduced earlier in the year, the Bill would establish a Designated Authority empowered to take provisional and, eventually, permanent control of foreign contributions and certain organisational assets—including land, buildings, schools and places of worship—when registration is cancelled, surrendered or not renewed. Control would occur through an administrative process without prior judicial adjudication. The Bill has faced strong opposition from civil society and religious groups and remains pending after consideration was deferred.
The government has framed both the rules and the proposed Bill as necessary measures to enhance transparency, accountability and traceability of foreign funds. Officials point to the need to close loopholes, prevent diversion of money for activities detrimental to the national interest, and align India’s regime with global standards on anti-money laundering and counter-terror financing, including those of the Financial Action Task Force (FATF). Supporters argue that purpose-based registration and stricter disclosures simply ensure that foreign money is used for the stated charitable or developmental purposes rather than for political or ideological agendas. They note that foreign funding itself is not banned; it is regulated more tightly in the public interest.
Critics, including international human rights organisations, see the changes differently. Amnesty International and others contend that the rules grant sweeping powers to police the activities, operations, management and leadership of foreign-funded NGOs. They argue that the curated list of permissible activities effectively excludes much human rights advocacy, policy research, awareness work on constitutional rights, and strategic litigation unless it is framed as strictly non-political. The minimum spending threshold and expanded disclosure requirements, they say, disproportionately burden smaller organisations and create a continuous compliance burden that converts one-time registration into ongoing government oversight. Restrictions on foreign nationals holding key positions and the broad interpretation of “political” content are viewed as further limiting independent civil society space.
Particular concern has been raised about the impact on religious minorities and faith-based organisations. Groups working on minority rights or running educational and social programmes with overseas support fear selective application or heightened scrutiny. Past cancellations of registrations belonging to organisations such as those linked to Christian networks have already fuelled perceptions of bias, even though the government maintains that the law is religion-neutral and applies equally to all. International bodies, including UN special rapporteurs and the UN Human Rights Committee, have previously criticised the FCRA framework for being overbroad and inconsistent with the rights to freedom of association and expression under the International Covenant on Civil and Political Rights. The latest amendments, critics argue, deepen rather than resolve those concerns.
For donors and long-term partners, the combination of the new rules and the pending Bill introduces additional uncertainty. Assets built with foreign contributions—hospitals, schools, community centres—could face administrative takeover if an organisation’s registration lapses. This may discourage sustained international partnerships and force many NGOs to rely more heavily on domestic funding, which is often harder to secure at scale.
In practical terms, the coming year will test the workability of the new regime. Organisations must map their programmes against the Schedule of 105 activities, update disclosures, ensure geographical alignment, meet the utilisation threshold, and prepare for intensified scrutiny. Larger, well-resourced NGOs are better placed to adapt. Smaller ones, especially those operating in remote areas or focused on rights-based work, face a steeper climb. Whether the heightened transparency and control ultimately strengthen legitimate development and social work or further shrink independent civil society space remains the central question raised by these rules. The answer will shape not only the future of foreign-funded non-profits in India but also broader perceptions of the country’s regulatory approach to voluntary action and religious freedom.
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