FCRA Amendment Bill 2026

The FCRA Amendment Bill 2026 seeks to overhaul India’s Foreign Contribution Regulation Act by imposing tighter caps on overseas donations, mandating more frequent disclosures, and creating a publicly accessible registry of foreign‑funded NGOs. Its hallmark provision limits any single foreign donor to no more than 10 % of an organization’s total annual income, a step that narrows the broader 20 % ceiling introduced by the 2020 amendment. By tightening the audit trail and curbing perceived avenues for external influence, the bill marks the most restrictive revision of the FCRA since its 2010 consolidation.

Historical Background

The Foreign Contribution (Regulation) Act was first enacted in 1976 to monitor foreign money entering Indian civil society, but it remained fragmented until the comprehensive 2010 consolidation. A landmark Supreme Court judgment in S. R. Bansal v. Union of India (2014) affirmed the government’s authority to scrutinise foreign‑funded NGOs, prompting the 2015 amendment that introduced a mandatory registration threshold of INR 10 lakh per year. The 2020 amendment, tabled by the Ministry of Home Affairs, added a 20 % cap on total foreign contributions for NGOs whose receipts exceeded INR 10 lakh, and required annual returns under Section 13 of the Act.

Key Provisions of the 2026 Amendment

The bill amends Section 13 to create a quarterly filing regime, obliging NGOs to submit Form FCRA‑Q within 30 days of each quarter’s end. Section 14 is expanded to compel organizations to publish, on their official website, the name, country, and amount of every foreign donor, as well as the aggregate foreign receipt for the reporting period. A new Section 20A introduces a “single‑donor ceiling” that caps any individual foreign contribution at 10 % of the NGO’s total income, enforceable through automatic rejection of bank transfers that exceed the threshold. Finally, the amendment establishes a Central Registry of Foreign‑Funded Entities, hosted by the Ministry of Home Affairs, where all registered NGOs must upload their quarterly returns and donor disclosures for public scrutiny.

Mechanism and Reporting Requirements

Under the revised framework, NGOs must first obtain a “Foreign Funding Clearance Certificate” (FFCC) before receiving any overseas money, a process that now includes a background check of the donor’s political affiliations. Once the FFCC is issued, each foreign contribution is routed through a designated “Foreign Contribution Account” (FCA) that is linked to the organization’s PAN and must be reconciled with the quarterly returns. Non‑compliance triggers a two‑stage penalty: an initial fine of INR 5 lakh for the first breach, escalating to a suspension of the FFCC for repeated violations, as stipulated in the amended Section 16(2). The bill also empowers the Enforcement Directorate to freeze bank accounts that receive contributions exceeding the 10 % cap without prior approval.

International Comparison

The United States regulates foreign influence through the Foreign Agents Registration Act (FARA), which requires agents of foreign principals to disclose activities but does not impose donor caps. The United Kingdom’s Charity Commission, meanwhile, mandates annual reporting of foreign income and applies a “public benefit” test but leaves donor limits to the discretion of individual charities. The European Union’s Transparency Register obliges NGOs receiving EU funding to disclose donors, yet it caps no single donor at a fixed percentage. By contrast, the Indian amendment’s 10 % ceiling is among the strictest globally, aligning more closely with Australia’s 5 % limit on foreign political donations introduced in 2021.

Current Status and Outlook

The FCRA Amendment Bill 2026 was introduced in the Lok Sabha on 12 February 2026 by Home Minister Amit Shah and passed the lower house on 8 August 2026 with a majority of 312 votes. It is presently under consideration in the Rajya Sabha, where opposition parties have raised concerns about potential constraints on legitimate humanitarian funding. If enacted before the end of 2026, the law will become operative from the start of the 2027‑28 financial year, giving NGOs a six‑month window to restructure their funding streams. Observers anticipate that the amendment will reshape the landscape of civil‑society financing, prompting both greater transparency and a strategic shift toward domestic resource mobilisation.