The Central Government has introduced sweeping amendments to the Foreign Contribution (Regulation) Act (FCRA), 2010, explicitly prohibiting the use of foreign funds for activities aimed at religious conversion while tightening compliance requirements for non-governmental organisations (NGOs) receiving overseas donations.

The revised FCRA Rules, 2026, distinguish between legitimate religious activities and conversion-related programmes. While foreign funding will continue to be permitted for activities such as religious education, preservation of scriptures, maintenance of places of worship, and promotion of traditional cultural practices, organisations will no longer be allowed to use overseas contributions for proselytisation or religious conversion initiatives.

Government says amendments strengthen transparency

According to the government, the changes are intended to enhance transparency, safeguard national sovereignty, and prevent foreign donations from being diverted to activities that could influence religious beliefs under the guise of charitable work.

Officials have argued that the amendments address legal ambiguities that previously allowed foreign-funded welfare programmes to be linked with conversion-related activities in some regions.

NGOs face stricter compliance requirements

Besides restricting conversion-related funding, the amended rules introduce several new compliance measures for organisations registered under FCRA.

NGOs will now be required to:

• Select their objectives from a predefined list of approved activities while applying or renewing registration.
• Specify the states and regions where foreign-funded projects will be implemented.
• Disclose the ultimate source of foreign donations instead of merely naming intermediary contributors.
• Meet a minimum expenditure threshold of ₹10 lakh over two years to retain FCRA registration.
• Submit more detailed utilisation reports before receiving subsequent instalments of foreign funds.

The amendments also tighten eligibility norms, with organisations having foreign nationals in key managerial positions facing stricter scrutiny in most cases.

Long-term tightening of FCRA framework

The latest amendments continue a broader trend of strengthening oversight of foreign-funded organisations.

Since 2015, more than 20,000 FCRA registrations have either been cancelled, denied renewal, or voluntarily surrendered following regulatory action or non-compliance. Earlier reforms included the 2020 prohibition on sub-granting of foreign contributions and stricter banking requirements for FCRA accounts.

The government maintains that these measures are necessary to ensure accountability and prevent misuse of foreign donations.

Critics raise concerns over humanitarian work

The amendments have, however, generated criticism from several civil society organisations, minority groups, and opposition leaders.

Critics argue that increased compliance obligations could place significant administrative burdens on NGOs working in education, healthcare, tribal development, disaster relief, and community welfare. Some have expressed concern that smaller organisations may struggle to meet the new reporting and expenditure requirements, potentially affecting the delivery of social services.

Supporters of the reforms counter that charities engaged in legitimate welfare activities have nothing to fear, provided foreign contributions are used strictly for approved purposes and remain fully transparent.

What the new FCRA rules mean

The 2026 amendments mark one of the most significant changes to India's foreign funding framework in recent years. By formally separating faith-based charitable activities from conversion-related work and introducing stricter reporting obligations, the government aims to strengthen oversight of foreign contributions while reshaping the operational landscape for thousands of NGOs across the country.

The impact of these changes will likely become clearer as organisations adapt to the revised compliance framework and the new rules begin to be implemented nationwide.