The government can appoint a “designated authority” to take over, manage or sell assets created with foreign funds by an NGO whose license under the Foreign Contribution (Regulation) Act, or FCRA, has been revoked, suspended, or simply not renewed.
They can act not only against the people directly running these NGOs, but also against their directors and trustees.
Both are changes to the existing law which the government plans to bring about through the Foreign Contribution (Regulation) Amendment Bill, 2026, which it submitted to the Lok Sabha on Wednesday.
While the purpose of the amendment is to ensure that foreign funds are not used to finance activities that are harmful to the national interest, those working in the NGO sector see it as a continuation of the government’s strong approach. A total of 21,700 FCRA licenses have been revoked so far, according to MHA data. It is believed that many others simply chose not to seek renewal of their FCRA licenses.
The amendment also proposes reducing the maximum penalty for violating foreign financing laws from five years to one year, in addition to setting time limits for the use of foreign funds received under the prior authorization category.
While introducing the bill in Lok Sabha, Union Minister of State for Home Affairs, Nityanand Rai, asserted that “the Modi government will not tolerate any misuse of foreign funding and will take strong action against such elements.”
The FCRA of 2010, which came into force in 2011, regulates the acceptance and use of foreign contributions and foreign hospitality to ensure that such flows do not adversely affect the national interest, public order or national security. The law entered into force on May 1, 2011 and has since been amended in 2016, 2018, and 2020. According to Home Office data, there are currently 16,000 bodies registered under the FCRA and receiving a total of approx $22,000 crores annually.
According to the Statement of Objects and Reasons of the Bill, the proposed law seeks to have a “comprehensive legal framework for granting, supervising, managing and disposing of foreign contributions and assets through designated authority, including temporary and permanent vesting; providing timelines for receipt and use under prior authorization; providing for suspension of certification; regulating the handling of assets during suspension; rationalizing penalties; and seeking prior approval from the central government to initiate investigation.”
Opposing the bill, Congress leader Manish Tiwari said, “The bill will give broad power to the executive without any constitutional guarantees.” Trinamool Congress leader Pratima Mondal said, “The new bill was dangerous and cruel because the entire central government would have absolute power and ensure centralization of power.”
“It is indeed dangerous but for those who indulge in forced religious conversion and those who misuse foreign funding for personal gain,” the pastor replied.
Senior lawyer Tanveer Ahmad Mir, who has appeared in several FCRA cases, described the amended provisions in the new bill as “draconian” and “oppressive”.
“This is a stringent provision (to seize assets of NGOs) and it has been borrowed from the Fugitive Economic Offenders Act (FEOA), where the assets of fugitives are seized without trial. It is an oppressive move by the government. In seizing assets so far, the prevailing law already allows agencies like CBI and ED to investigate NGOs and seize assets. So why do we need a separate law? Also, how can you come up with a law that seizes assets and sells them without conviction, this is a complete aberration and violates every Presumptions of innocence.
“The government’s goal is to ensure that human rights organizations or those critical of the government do not receive any foreign funding because their activities do not please the government,” Mir added.
