The Ministry of Home Affairs (MHA) on Tuesday notified the Foreign Contribution (Regulation) Amendment Rules, 2026, tightening the framework for non-governmental organisations (NGOs) receiving foreign funds. The new rules mandate that NGOs must specify the purpose for which foreign funding is sought and the state or Union Territory (UT) where they intend to operate.
Key Changes in Registration and Reporting
Under the amended rules, associations registered under the Foreign Contribution (Regulation) Act (FCRA), 2010, must now categorise their activities into five defined segments: religious, social, economic, cultural, and educational. For the first time, the government has explicitly listed permitted activities under each category. Notably, proselytisation is excluded from the religious purpose segment, a move aimed at curbing religious conversions under the guise of welfare activities.
The rules state: “Documentation, preservation and revival of indigenous and tribal faith practices, rituals and systems of worship (excluding proselytisation) is permitted.” NGOs and their functionaries are also required to disclose their social media accounts, and funding with political motives is prohibited.
Additional Fees and Compliance Requirements
An additional fee of Rs 300 will be payable for each extra purpose and for every additional state or UT included in the certification application. Existing FCRA-registered associations will be given one year to furnish the mandated details if they wish to retain their registration. The rules further stipulate that an association having foreign citizens as its chief office-bearers will ordinarily not be eligible for registration. However, the Centre may specify circumstances in which such organisations may be considered for registration or prior permission.
Definition of Reasonable Activity
The amendments introduce a new provision relating to “reasonable activity”. For cancellation of registration under Section 14 and renewal under Section 16 of the Act, an association will be deemed to have undertaken reasonable activity if it has utilised at least Rs 10 lakh of foreign contributions for approved purposes during the previous two financial years.
Another key change is the formal definition of the term “key functionary”, which now includes a company director, partner in a firm, trustee of a trust, and Karta of a Hindu Undivided Family.
Penalties for Violations
In a separate order, the government revised compounding penalties for several offences under the FCRA. Organisations that spend foreign contributions on administrative expenses beyond the permissible 20 per cent limit will be required to pay a penalty of Rs 1 lakh or five per cent of the amount spent beyond the limit, whichever is higher. Utilisation of funds for speculative activities in violation of FCRA provisions will attract a penalty equal to 30 per cent of the amount invested in such activities or Rs 1 lakh, whichever is higher. All returns earned from such investments will also be recoverable.
The rules come despite concerns raised by the US over India’s tightening of foreign funding regulations for NGOs.
