FCRA Amendment Bill 2026: No ban on foreign funding, says India’s envoy to US as he counters ‘myths’ with ‘facts’

The proposed Foreign Contribution (Regulation) Amendment Bill, 2026, is facing opposition in India and questions over its provisions, including concerns about its impact on foreign funding to NGOs and community groups.

Amid the debate, former foreign secretary Vinay Mohan Kwatra took to X to address what he described as misconceptions around the Bill, saying the proposed changes are aimed at regulating and increasing transparency in foreign financial flows, not stopping foreign funding to Indian organisations.

The draft adjustments are designed to enhance transparency, governance and oversight of foreign financial flows, and to tackle some of the issues discussed in the public debate on the legislation, the former foreign secretary wrote in a post on X.


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Kwatra said that India is not an exception when it comes to curbing foreign investments and provided examples of regulation of foreign funds in some big democracies. He pointed to the US Foreign Agents Registration Act (FARA), enacted in 1938, and the Foreign Account Tax Compliance Act (FATCA), introduced in 2010. Australia enacted legislation in 2018, Canada in 2024 and the UK's scheme came into force in July 2025, he said. The European Union is also legislating in this area.

The proposed law has also raised fears that FCRA could be used against particular religious or community groups. However, Kwatra did not go along with this reading of the law, stating that the law does not discriminate on the basis of an organisation's religious, community or ideological affiliation.

He said that faith-based welfare activities, including religious education, maintenance of places of worship and charitable work, remain eligible for foreign funding. The key requirement, he said, is compliance with the regulatory framework governing the receipt and use of such funds.

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NGO assets under FCRA

One of the primary concerns with the proposed changes is how assets will be treated at the time of withdrawal or surrender of the FCRA.

The existing law already says that fund or property brought to India by foreign contribution or foreign assets on account of cancellation of the registration of the organisation or its surrender shall belong to a State Government authority, based on which, Kwatra added that the existing law is quite clear and there was no need for a specific amendment to address the issue. This provision came into existence in 2010, he said.

The 2026 Bill, according to Kwatra, would add a designated authority to safeguard such assets and provide a mechanism for their return if the organisation restores its registration. In that case the assets and the unused funds would be returned in its entirety, he said.

Further, the plan addresses specific protection of property related to places of worship. If an association has been cancelled, and there is property attached to the worship site, however, then the property would be passed to another FCRA-registered association of the same faith, to continue worship, Kwatra said.

Has FCRA cut foreign fundings for NGOs?

Kwatra also disputed the argument that FCRA has hindered the foreign funding of civil society organisations.

According to the figures cited by him, foreign contributions received by registered organisations increased from around $1.2 billion in 2010-11 to $2.67 billion in 2024-25.

India has more than three million NGOs, while only 14,450 organisations have FCRA registration, he said. This means the overwhelming majority of civil society organisations do not come under the FCRA framework.

Kwatra clarified that FCRA does not bar foreign charity, research grants or humanitarian aid. Rather, the organisations that accept such contributions must register, accept the money in the mandated manner, and then make a report regarding the use of the money.

Why is India changing FCRA rules?

The FCRA framework is not new. India introduced its first FCRA in 1976 and replaced it with a new framework in 2010. The law was subsequently amended in 2016, 2018 and 2020.

The proposed 2026 Bill and Rules aimed at increasing transparency, clarity of rules and better governance are the next step in this process, said Kwatra.

He further claimed that the control of foreign funds in political and public forums is a sovereign duty and has a connection with national security issues. Such regulation, he said, is also followed by several democracies.

The question is not so much whether foreign funding will be permitted, but how organisations receiving such funding will be regulated and held accountable for how their money is used. The proposed changes, however, have faced opposition in India as well as criticism from a US lawmaker.

Congress general secretary KC Venugopal has described the proposed FCRA changes as “anti-people” and accused the Centre of targeting NGOs through tighter foreign-funding regulations. He said the Congress and other Opposition parties would strongly oppose the Bill if it is introduced in Parliament.

The proposed changes have also drawn criticism in the US. Republican Congressman Riley M. Moore has described the Bill as a “clear attack against Christians” and raised concerns that the proposed provisions could allow the Indian government to take control of churches and religious charities. India has rejected those claims, with the Ministry of External Affairs saying regulation of foreign funding is an internal legislative matter and that the proposed changes are aimed at transparency and accountability rather than any particular religion or group.

Kwatra said that the proposed changes don't aim to curb foreign funding for Indian organisations and don't stop Indian organisations from raising funds abroad. Tens of thousands of associations registered under FCRA continue to receive foreign funds for areas including healthcare, education, disaster relief, research and humanitarian work, he said.