INTRODUCTION
The Foreign Contribution (Regulation) Act (FCRA) traces its origins to 1976, when the Government of India enacted legislation to regulate the acceptance and utilisation of foreign contributions—including donations, grants, gifts, and transfers—as well as foreign hospitality by certain individuals, associations, non-governmental organisations (NGOs), and companies. The primary objective of the legislation was to ensure that foreign contributions did not adversely affect India’s sovereignty, democratic institutions, or public interest.
Over time, the Foreign Contribution (Regulation) Act, 1976 was considered inadequate to address the evolving regulatory and security concerns associated with foreign funding. Consequently, it was repealed and replaced by the Foreign Contribution (Regulation) Act, 2010 which was thereafter significantly amended through the Foreign Contribution (Regulation) Amendment Act, 2020, which introduced several major reforms.
More recently, the Foreign Contribution (Regulation) Amendment Bill, 2026 has been introduced in the Lok Sabha to propose further changes to the existing regulatory framework.
THE ACT AND ITS COMPLIANCES
The Foreign Contribution (Regulation) Act, 2010 was enacted to ensure that foreign contributions are received and utilised in a transparent manner without compromising the sovereignty, integrity, security, or public interest of the nation. A foreign contribution refers to any donation, delivery, or transfer made by a foreign source in the form of an article, currency (whether Indian or foreign), or security. However, an article given as a personal gift to an individual, the market value of which does not exceed ₹1 lakh, is excluded from the definition of a foreign contribution.
The Act applies to individuals, associations, trusts, societies, NGOs, Section 8 companies, and other entities that receive or intend to receive foreign contributions. However, the Act prohibits certain persons—including election candidates, members of legislatures, political parties, public servants, judges, government employees, and specified media personnel—from accepting foreign contributions, subject to certain exemptions provided under the Act.
Under the Act, any person or organisation having a definite cultural, economic, educational, religious, or social programme including societies, public charitable trusts, Section 8 companies, and other non-profit organisations working for public welfare, must obtain either a “Certificate of Registration” or “Prior Permission” from the Central Government before becoming eligible to receive foreign contributions. A Certificate of Registration shall be granted only if the Central Government is satisfied that the applicant is genuine, has not been prosecuted or convicted for offences involving misappropriation or misuse of funds, is not fictitious or benami, has undertaken reasonable activities in its chosen field, and is not likely to utilise foreign contributions for purposes prejudicial to the sovereignty and integrity of India, public interest, national security, or communal harmony. Once granted, registration remains valid for a period of five years and is subject to renewal and continued compliance with the provisions of the Act and the Rules.
As per the administrative guidelines issued by the Ministry of Home Affairs, an organisation seeking registration is generally expected to have been in existence for at least three years and to have undertaken reasonable activities in its chosen field for the benefit of society. It should also demonstrate financial credibility by incurring an expenditure of approximately ₹10–15 lakh during the preceding three years, supported by audited financial statements. In essence, eligibility for registration is determined by a combination of legal status, operational track record, financial credibility, and regulatory compliance.
An association in its formative stage is not eligible to obtain a Certificate of Registration under the Foreign Contribution (Regulation) Act, 2010. It may, however, apply for Prior Permission to receive foreign contributions for a specific project or purpose. Such permission is granted for a specified amount from an identified foreign donor and is restricted to the activities or programmes approved by the Central Government. To be eligible, the association must be registered under the applicable law, such as the Societies Registration Act, the Indian Trusts Act, or the Companies Act, 2013 (as a Section 8 company). It must also submit a commitment letter from the foreign donor specifying the amount and purpose of the proposed contribution, together with a detailed project proposal explaining how the funds will be utilised for the benefit of society.
An application for the grant of Prior Permission under the Foreign Contribution (Regulation) Act, 2010 must be submitted electronically through the prescribed online portal. The Central Government ordinarily grants such permission within ninety days from the date of receipt of a complete application. The permission remains valid only for the specific project or purpose for which it is granted and expires upon the complete utilisation of the foreign contribution in accordance with the approved terms and conditions.
THE SUBSEQUENT AMENDMENTS
The Foreign Contribution (Regulation) Amendment Act, 2020 introduced several significant changes aimed at strengthening regulation, transparency, and accountability in the receipt and utilisation of foreign contributions. One of the most important amendments was the prohibition on the transfer of foreign contributions from one registered organisation to another, thereby restricting the practice of sub-granting. The Amendment also made it mandatory for all FCRA-registered organisations to receive foreign contributions only through a designated FCRA account maintained at the State Bank of India, New Delhi Main Branch. In addition, it introduced stricter reporting and disclosure requirements to enhance regulatory oversight.
Further, foreign contributions must be utilised only for the purposes for which they are received. Prior to the 2020 Amendment, up to 50% of the foreign contribution received during a financial year could be utilised towards administrative expenses which has now been reduced to 20%, thereby imposing stricter control over the utilisation of foreign contributions. It also made the submission of Aadhaar details, or a passport in the case of foreign nationals, mandatory for key functionaries seeking registration or renewal, thereby strengthening identification and monitoring mechanisms.
In the recent times, the Foreign Contribution (Regulation) Amendment Bill, 2026 proposes further significant changes to the existing framework. One of its principal features is the establishment of a Designated Authority, empowered to take over, manage, and dispose of the foreign contributions and assets of organisations whose FCRA registration has been cancelled, surrendered, or has otherwise ceased. The Bill also introduces the concept of “cessation of registration”, whereby failure to apply for renewal or obtain renewal within the prescribed period results in the automatic cessation of FCRA registration, along with restrictions on the receipt and utilisation of foreign contributions. The proposed amendments seek to strengthen compliance and enforcement by providing greater regulatory oversight over foreign-funded assets, both during and after the validity of registration.
At present, the Foreign Contribution (Regulation) Amendment Bill, 2026 has been introduced in the Lok Sabha and remains pending consideration. It has not yet been enacted into law.
CONCLUSION
The recent amendments and the proposed legislative changes reflect the Government’s continued emphasis on transparency, accountability, and effective regulatory oversight in the regulation of foreign contributions. The proposed framework seeks to enhance enforceability by strengthening regulatory control over foreign-funded organisations, their donations, grants, and assets, while placing greater responsibility on recipient entities to ensure lawful utilisation and compliance. Accordingly, organisations receiving foreign contributions should ensure strict adherence to the provisions of the Act and the Rules to avoid regulatory action and promote responsible and transparent governance.
