The Foreign Contribution (Regulation) Act (FCRA) was originally enacted in 1976 during the Emergency to prevent foreign interference in India’s domestic politics. It was replaced by a more comprehensive Act in 2010. Administered by the Union Ministry of Home Affairs (MHA), the FCRA requires all associations and NGOs that wish to receive foreign funding to register with the government, maintain designated bank accounts, and file annual returns, subject to strict audits.

The FCRA Amendment Rules, 2026, notified by the Home Ministry on June 22, 2026, represent a shift from the previous regime. Earlier, a single registration allowed an NGO to operate nationwide in multiple fields (such as education and healthcare) using foreign funds. The new rules force NGOs to select and stick to specific categories (e.g., social, educational, religious) and specific States/UTs, creating separate compliance silos for organizations operating in multiple regions.

Under Parliamentary Rules, questions asked by MPs can be disallowed by the Secretariat if they pertain to matters classified as ‘secret’ or sensitive to national security. In recent years, CPI(M) MP John Brittas and other lawmakers protested when questions about NGO license cancellations were blocked. Over the last decade, the Indian government has cancelled or refused renewal to over 20,000 NGOs (including Oxfam, Greenpeace, and Centre for Policy Research), citing violations of FCRA rules without revealing detailed evidence or justifications.

In Noel Harper v. Union of India (April 2022), a three-judge bench of the Supreme Court upheld the constitutional validity of the 2020 Amendments to the FCRA. The petitioners (NGOs) argued that these changes violated fundamental rights. The Court rejected this, holding that accepting foreign contributions is not a fundamental or vested right, but a matter of state policy. It accepted the government’s argument that unregulated foreign funds could threaten national security and sovereignty, using the metaphor that foreign funds are like a medicine that can turn toxic if uncontrolled.

In Indian Social Action Forum (INSAF) v. Union of India (March 2020), the Supreme Court examined Rule 3 of the FCRA Rules, 2011. This rule allowed the government to categorize NGOs as organizations of a “political nature” (denying them foreign funds) if they participated in political actions like bandhs, hartals, or road blocks. The Court read down this rule, holding that only organizations directly involved in active party politics or contesting power could be classified as “political.” It held that public advocacy, peaceful protests, and struggles for social and economic betterment are legitimate activities of civil society and do not fall under active politics.

In March 2026, the Union Government introduced the Foreign Contribution (Regulation) Amendment Bill, 2026. A controversial provision in the Bill stated that upon the cancellation, surrender, or non-renewal of an NGO’s registration, its assets (created using foreign funds) would vest with a government-appointed authority. Civil society organizations strongly protested, arguing that this would lead to arbitrary state takeovers of educational, healthcare, and welfare infrastructures built over decades.