New Delhi: India’s proposed amendments to the Foreign Contribution Regulation Act (FCRA) have triggered a political and international debate, with critics warning that the changes could give the government greater control over the assets of NGOs, charities and religious organisations.
The government, however, has rejected those concerns, arguing that the proposed legislation is aimed at improving transparency, accountability and the management of foreign-funded assets.
The controversy has also spilled into India-US relations after US Republican Congressman Riley Moore criticised the proposed amendments, claiming they could enable the government to take over churches and religious charities in India.
India has strongly pushed back against that interpretation.
What does the proposed FCRA amendment seek to change?
The FCRA regulates the receipt and use of foreign contributions by NGOs, trusts, charities and other organisations in India. The country first introduced such legislation in 1976, before replacing it with the current framework in 2010.
One of the most significant provisions in the proposed 2026 amendment is the creation of a designated authority to manage foreign-funded assets when an organisation's FCRA registration is cancelled, surrendered or not renewed.
That provision has become the centre of the controversy.
Opposition parties and civil society critics argue that giving an authority the power to manage such assets could increase government control over NGOs and charitable institutions. Some have also raised concerns that minority-run and religious organisations could be disproportionately affected.
Government says the bill does not create a new power to seize assets
India's government has disputed those claims.
India's Ambassador to the United States, Vinay Kwatra, addressed the controversy in a series of posts on X, describing several criticisms of the proposed legislation as "myths."
Kwatra argued that the FCRA does not prohibit foreign donations but regulates how foreign contributions are received and used. He pointed to organisations working in areas including healthcare, education, disaster relief, research and humanitarian assistance that continue to receive foreign funding.
He also argued that foreign contributions to FCRA-registered organisations have increased substantially over the years, challenging the claim that India's foreign-funding framework is designed to shut down civil society organisations.
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According to Kwatra, India has more than three million NGOs, while only a relatively small proportion are registered under the FCRA. He said the law therefore applies only to organisations receiving foreign contributions under the FCRA framework.
The most contentious issue remains the treatment of assets.
Kwatra said foreign-funded assets have been subject to statutory provisions since 2010 and argued that the proposed amendment does not create an entirely new power to confiscate them. Instead, he said, the designated authority would safeguard such assets and allow them to be returned if an organisation subsequently regains its FCRA registration.
What about churches and religious organisations?
Religious organisations have also raised concerns about the possible impact of the proposed changes.
Kwatra said the legislation does not target any particular religion or community and that FCRA rules apply uniformly to organisations regardless of their faith or ideology.
He further argued that if a place of worship belonging to an organisation whose FCRA registration has been cancelled was created using foreign contributions, the property could be transferred to another FCRA-registered organisation of the same faith so that religious activities can continue.
These claims are central to the government's argument that the legislation is intended to protect the use of foreign-funded assets rather than enable arbitrary government takeovers.
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Why has the issue attracted attention in the US?
The proposed changes have attracted unusual attention in Washington following criticism from Republican Congressman Riley Moore.
Moore argued that the amendments could affect churches and religious charities and warned that the issue could have implications for India-US relations.
India's Ministry of External Affairs rejected the criticism, describing FCRA as an internal legislative matter. The ministry also pointed out that several democracies have laws regulating foreign funding and foreign influence.
Kwatra made a similar argument, citing foreign-funding and foreign-influence regulations in countries including the United States, Australia, Canada and the United Kingdom.
His broader message was that regulating foreign financial flows is not unique to India and should not automatically be interpreted as an attempt to restrict legitimate charitable activity.
The debate is not over
The proposed FCRA amendments have therefore created a clash between two competing interpretations.
The government says the legislation will strengthen transparency, accountability and oversight while ensuring that foreign-funded assets remain available for their intended charitable or religious purposes.
Critics, meanwhile, fear that the expanded administrative powers could increase state control over civil society and create a chilling effect on organisations that depend on foreign funding.
Ultimately, the impact of the proposed changes will depend on the final legislation approved by Parliament and how its provisions are implemented.
For now, the FCRA amendment remains closely watched in India and abroad, particularly because it sits at the intersection of foreign funding, civil society, religious institutions and the government's regulatory powers.
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