Dr. Bhashyam Kasturi
The End of NGO Autonomy?
Clearly, the government intends to substantially tighten the foreign funding of NGOs operating in India, obviously the MoC background indicates a focus on religious conversions and possible misuse of funds for other purposes, such as communal disharmony. That US lawmaker Chris Smith (Republican-New Jersey) had urged Marco Rubio to ensure that India protected religious freedom. He has reportedly asked the Indian government to drop the provisions in the amended bill on expropriating the assets of NGOs. Smith is said to be a critic of India’s human rights record under Prime Minister Narendra Modi.
The US expressing concern over the new bill is part of their state policy, to freely comment on the internal matters of other countries. In their mind, the new statute could well be used to create problems for organizations like the MoC. After all, in December 2021, the government of India had not renewed the licence of MoC, based on some “adverse inputs”. However, the MHA did officially refute the allegation made by Mamata Banerjee, then Chief Minister of West Bengal that the Central Government had frozen the bank accounts of MoC. MHA stated that it was the MoC that requested the State Bank of India to freeze their account. In January 2022, the MoC’s licence was renewed after considerable international and domestic pushback.
The Government’s New Power Over NGOs
The Indian government has steadily tightened the enforcement of the Foreign Contribution (Regulation) Act (FCRA), arguing that foreign funding should not be used to support religious conversions or other activities deemed contrary to the national interest. While the law continues to permit religious education, cultural preservation and faith-based charitable work within its legal framework, the government says the stricter rules are intended to limit foreign influence on India’s religious landscape and ensure greater transparency in the use of overseas contributions.
Diving deep into the proposed amendments to the FCRA Act, it becomes apparent that the primary objective is to create an authority in the form of an administrator, who can take over the assets of a NGO receiving foreign funds, if registration of the organization is suspended, cancelled or not renewed. Section 15 of the 2010 act is sought to be replaced by a completely new Chapter IIIA. The original Section stated that if the licence of a NGO was cancelled or suspended, then its assets would be “held by an authority as maybe prescribed”. There is a complementary Section 14 A which defines what constitutes the “automatic cessation” of a NGO’s licence.
The MHA FCRA Dashboard lists 22,498 cases of institutions whose license has been cancelled or deemed closed and 15,206 cases of associations whose licence deemed to have expired recently. Among the 6000 organizations that have come under official scrutiny are Oxfam India Trust and the Indian Medical Association (IMA), IIT Delhi and Jamia Milia Islamia, whose FCRA registration deemed to have ceased or rejected way back in 2021-22.
A notice issued in November 2024, issued by the MHA, provides a consolidated list of reasons/grounds for which a renewal application can be rejected. Amongst the various reasons sighted, one prominent reason states “Association has diverted foreign contributions” for “anti-development activities” or for “inciting malicious protests”. Apart from this mention is found – “associations being involved in religious conversion and proselytization and links to radical/terrorist groups”.
There is thus sufficient clout in the existing statute to ensure that if the Central Government so desires, it can refuse to renew or register an application. What makes the amendments proposed in the bill submitted to Parliament in March 2026 more stringent is – the provision that authorises the government to take over the assets of organizations whose licence is cancelled, suspended or not renewed. What is new this time is the creation of a new authority that could take over and run the assets of an organization that becomes defunct.
2020 Amendment to FCRA
Notably, the government had amended the FCRA Act in 2020 also, with a view to clarifying the nature of state control over foreign contributions. For instance, Section 12 of the Act was modified by inserting a new sub-section, which directed that all persons who apply to receive foreign contributions shall open an “FCRA Account”. Thus, it is seen that the move towards greater State control over NGOs has been ongoing for some time now, and the latest amendments proposed in 2026 leave little room for legal interpretation and give clarity to the language of the statute. The FCRA Amendment Bill 2026, is an attempt to create oversight and monitoring mechanisms, that will give the State a free hand in taking over the assets of associations or NGOs, whose licence has been suspended, cancelled or has not been renewed. Charges of overstepping the line are evident in the new Act, with the proposed “Designated Authority”, who is authorised to take over vested assets when deemed appropriate.
Critics Warn of Expanded Government Powers
Naturally, the amended bill has come in for considerable criticism by the opposition parties, who claim that the bill is “unconstitutional” and an assault on civil liberty”.
Pertinently, the Kerala Assembly has passed a resolution formally demanding the complete withdrawal of the FCRA Amendment Bill 2026, stating, “these measures are draconian”. Fundamental to the criticism, is the observation that the proposed bill bars judicial intervention by civil courts and tribunals in the transfer of assets creating an unprecedented power concentration in the hands of the government.
Two other points of contention flow from the 2020 Amendments. First, is the direction that all NGOs open an account in a single branch of SBI in New Delhi, creating a logistic issue for many associations. Second, the 2020 amendment banned the sub-transfer of foreign funds to smaller NGOs, making it difficult for smaller organizations to survive. Many human rights groups and associations have been at the receiving end of government’s new laws on foreign funding, including Green Peace, Oxfam and Amnesty International.
The Next Phase of NGO Oversight
One should not look at NGO’s receiving funds from abroad only in the context of the proposed amendments to the FCRA Act. There are three other pillars which make the framework. The first important is the DARPAN ID, which is now mandatory for all NGOs wishing to apply for government grants, securing FCRA licensing and retaining 80G tax exemptions. Second, tax laws have been streamlined to ensure compliance by NGOs. Thirdly, existing legal and compliance structures must be followed in order to establish/register and operate any NGO in India.
Thus, the FCRA Amendments in 2026, really round off a whole-of-government approach on the matter, primarily viewed through a national security lens. With 240 seats in the Lok Sabha on its own, the BJP is currently riding high in Parliament. Along with its NDA allies, the party commands 318 seats in the Lok Sabha, indicating that the proposed FCRA bill will, in all likelihood, go through. A regulatory regime in India that is in line with the mindset that tends to securitize all aspects of governance, is clearly the new norm.
