Foreign Contribution (Regulation) Act, 2010 (FCRA)

The Foreign Contribution (Regulation) Act, 2010, or FCRA, is the law that controls how people and organisations in India can receive money or gifts from foreign sources. Any NGO, trust, society or institution that wants foreign donations must first get permission from the Ministry of Home Affairs (MHA). The law also completely bans some people, such as political parties, judges and journalists, from taking foreign money. Its aim is simple: foreign money should not be used to harm India's national interest, internal security or democracy.

Why does this law exist?

Money gives influence. If a foreign government or agency could freely fund groups inside India, it could try to shape elections, public opinion or protests to suit its own interests. The FCRA works like a security check at the border for money. Good-faith donations for health, education or relief are allowed, but they must come through a known, watched channel. The State also wants to know who is funding whom, so that money is not diverted to terrorism or to activities that disturb public order.

Where did it come from?

The first law was the Foreign Contribution (Regulation) Act, 1976, passed during the Emergency. At that time there were fears that foreign agencies were secretly funding political activity in India. In 2010, Parliament repealed the 1976 law and passed a new, stronger FCRA, 2010. It got Presidential assent on 26 September 2010 and came into force on 1 May 2011. It has been changed several times since:

• Finance Act, 2016: Said that an Indian company with foreign shareholding within the limits allowed under FEMA (Foreign Exchange Management Act, 1999) is not a "foreign source". The Finance Act, 2018 then applied a similar change to the old 1976 Act, going back to 1976.
• FCRA Amendment Act, 2020: A major tightening, passed in September 2020 (details below).
• FCRA Amendment Bill, 2026: Introduced in March 2026, now with a Joint Parliamentary Committee. It deals mainly with what happens to foreign-funded assets after registration ends.

What counts as "foreign contribution"?

Under Section 2(1)(h), a foreign contribution is any donation, delivery or transfer from a foreign source of:

• any article (except a personal gift below a value set by the government),
• any currency, Indian or foreign,
• any security, such as shares or bonds.

A "foreign source" (Section 2(1)(j)) includes foreign governments, foreign companies, foreign citizens, international agencies and foreign trusts. Money from an Indian company is also treated as foreign if more than half its share capital is held by foreigners, unless the holding is within FEMA limits.

Who cannot take foreign money at all?

Section 3 bans these persons from accepting any foreign contribution:

• candidates for elections,
• journalists, columnists, cartoonists, editors, owners, printers and publishers of registered newspapers, and news broadcasting companies,
• judges, government servants and employees of government-owned bodies,
• members of any legislature,
• political parties and their office-bearers,
• organisations of a political nature, as notified by the government,
• public servants (added by the 2020 amendment).

How does an organisation get foreign money legally?

Section 11 gives two routes:

1. Registration: The organisation gets an FCRA certificate under Section 12. It can then receive foreign money for its approved social, cultural, economic, educational or religious work. The certificate is valid for 5 years. It must be renewed within six months before it expires (Section 16).
2. Prior permission: A newer or smaller organisation can get one-time permission to receive a specific amount from a specific donor for a specific purpose.

Think of registration as a regular driving licence, and prior permission as a one-day pass for one trip.

Who is eligible for registration?

Section 12(4) lists the conditions the government checks before it grants registration or prior permission. The same conditions apply again at renewal. The applicant must show that it:

• is not fictitious or benami (a fake body, or one run in someone else's name to hide the real owner),
• has not been prosecuted or convicted for activities aimed at religious conversion through inducement or force, directly or indirectly (Section 12(4)(a)(ii)),
• has not been prosecuted or convicted for creating communal tension or disharmony,
• has not been found guilty of diverting or misusing its funds,
• is not engaged, or likely to engage, in spreading sedition or supporting violent methods,
• is not likely to use foreign money for personal gain or for undesirable purposes.

What did the 2020 amendment change?

The FCRA Amendment Act, 2020 came into force on 29 September 2020. Its main changes:

• No passing on (Section 7): A registered NGO can no longer transfer foreign money to any other person or NGO. Earlier, big NGOs often "sub-granted" to small grassroots groups.
• One entry gate (Section 17): All foreign money must first come into an "FCRA account" at the SBI, New Delhi Main Branch. From there, it can be moved to other accounts for use.
• Admin cap (Section 8): Not more than 20% of foreign money can be spent on administrative costs (salaries, rent, office). Earlier the cap was 50%.
• Aadhaar (Section 12A): Office-bearers, directors and key functionaries must give their Aadhaar number. Foreigners must give a passport or Overseas Citizen of India (OCI) card copy.
• Longer suspension (Section 13): The government can suspend a registration for 180 days, and extend it by up to another 180 days.
• Surrender (Section 14A): An organisation can now voluntarily give up its certificate.

What happens when registration ends?

Under Section 14, the government can cancel registration for reasons like breaking the Act or misusing funds. A cancelled organisation cannot re-apply for 3 years. Section 15 already says that the foreign money and assets of a cancelled or surrendered organisation vest in (legally pass to) an authority chosen by the government. That authority can run the activities in public interest.

Under Section 31, an organisation unhappy with certain Central Government orders, such as an order refusing or cancelling registration, can appeal to the High Court within 60 days.

The 2026 Bill makes this system much wider and more detailed:

• It creates a Designated Authority to supervise, manage and dispose of foreign money and assets once registration "ceases".
• "Ceasing" includes cancellation, surrender and non-renewal, including when a renewal application is rejected.
• Assets built wholly or partly with foreign money can vest in the authority. The authority may give them to a government body or sell them and credit the money to the Consolidated Fund of India.
• For places of worship, the authority must keep their religious character.
• "Key functionaries" (directors, trustees, office-bearers, managing committee members) are presumed liable for offences by the organisation, unless they prove they did not know or took due care.
• The maximum jail term for many offences is reduced from 5 years to 1 year.
• Organisations using the prior permission route must use the money within a set time.

The numbers (as of September 2026, as reported)

About 22,496 FCRA registrations have been cancelled since 2015. Around 14,466 associations remain active. Most cancellations were for not filing annual returns, not for security reasons.

What have the courts said?

In Noel Harper v. Union of India (8 April 2022), a three-judge bench of the Supreme Court upheld the 2020 amendments (Sections 7, 12(1A), 12A and 17). The Court said there is no absolute fundamental right to receive foreign contributions. Parliament can put reasonable limits on it to protect sovereignty, security and public order. Earlier, in Indian Social Action Forum (INSAF) v. Union of India (2020), the Court upheld the power to declare groups "organisations of a political nature".

But it said a group cannot be put in this list only for taking part in public protest or advocacy. [Unverified]

In October 2026, a Division Bench of the Madras High Court (Madurai Bench) upheld the refusal of FCRA registration to a Kodaikanal trust. It held that organisations engaged in converting people from one religion to another can be denied registration, and that the conversion bar in Section 12(4)(a)(ii) applies to all religions. Religious bodies whose work does not harm India's secular character or social harmony can still be registered.

The Court also said applicants must fully disclose their activities: a religious body that presents itself as secular can be rejected for misrepresentation.

Commonly confused concepts

• FCRA vs FEMA: FEMA (1999) manages foreign exchange in trade and investment, run by the RBI and the Finance Ministry. FCRA covers donations and gifts, and is run by the Home Ministry. FCRA is a security law. FEMA is an economic law.
• FCRA registration vs Income Tax registration (Sections 12A/12AB and 80G): Income Tax registration gives tax exemption to charities and tax benefits to donors. It does not allow foreign donations. An NGO needs FCRA separately for that.
• Registration vs prior permission: Registration is for 5 years and many donors. Prior permission is for one donor, one amount, one purpose.
• Suspension vs cancellation vs surrender: Suspension is temporary (up to 360 days). Cancellation is a penalty with a 3-year bar on re-applying. Surrender is a voluntary exit by the organisation.

Issues, criticism and the way forward

• The government's view: Foreign money has in some cases been misused or diverted. Assets built with foreign money for public purposes should stay in public use, not become private property after registration ends. Tighter rules improve transparency and protect internal security.
• Critics' view: Asset vesting could happen by an administrative order, without a court deciding first. An organisation that simply failed to renew could lose a school or hospital as harshly as one proven guilty of wrongdoing. Mixed assets (part foreign, part Indian money) raise questions about fairness.
• Impact on service delivery: Many schools, hospitals, disability and relief services in remote areas depend on foreign grants. A sudden takeover or closure can hurt the poor people they serve.
• Due process: Critics ask for a hearing before refusal of renewal, written reasons, and an appeal against the refusal itself.
• International standards: The Financial Action Task Force (FATF), a global body against terror financing, asks countries to use a "risk-based" approach. This means focusing on high-risk groups instead of controlling all non-profits equally.
• Way forward suggested by experts: Clear, time-bound renewal rules; an independent appeal body or tribunal; a judicial check before assets are taken; separate treatment for minor paperwork lapses and real misuse; and more domestic giving (CSR, tax incentives) to reduce dependence on foreign money.

Concepts to Know

• NGO (Non-Governmental Organisation): A group that works for a social cause without being part of the government and without aiming for profit. In India, NGOs usually register as trusts, societies or Section 8 companies.
• Vesting: When the legal ownership or control of property passes from one person to another by law.
• Consolidated Fund of India: The main account of the Union government (Article 266). All its revenue goes in, and money can be taken out only with Parliament's approval.
• Sub-granting: When a big NGO receiving foreign money gives part of it to smaller partner NGOs to do the actual field work. The 2020 amendment banned this for foreign money.
• Key functionary: A person who runs or controls an organisation, such as a trustee, director or office-bearer.
• Due process: The idea that the State must follow fair steps (notice, hearing, reasons, appeal) before taking away someone's rights or property.
• Inducement: Offering a reward, such as money, a job or free services, to persuade someone to do something. Under the FCRA, conversion by inducement or by force is a bar to registration.