Centre tightens norms for foreign donations

24 JUNE 2026

Non-governmental organisations (NGOs) wanting to access foreign funds must now stick to a list of activities specified by the Centre, according to the latest amendment to the Rules of the Foreign Contribution Regulation Act (FCRA), 2010, notified.
While NGOs seeking foreign funds are required to register under one of the five permitted categories, namely social, economic, educational, cultural, and religious, this is the first time separate activity lists have been laid out for those in each category.
NGOs must now disclose their activities, the geographical scope of their programmes, their websites, social media accounts, and publications.
They must pay separate fees for each category and State or Union Territory they operate in, as opposed to the previous single fee for FCRA registrants.
Any new registration must follow the new norms and existing registrations must comply with the changes within the next year.
Any violations will be penalised with a minimum fine of ₹1 lakh, according to another order from the Union Home Ministry.
The Ministry of Home Affairs regulates all foreign donations through the FCRA.
Earlier amendments of the Rules only required NGOs to give an undertaking that their acceptance of foreign funds is not likely to affect the sovereignty and integrity of India or impact friendly relations with foreign states or disrupt communal harmony.

Objectives of FCRA

The Act aims to:

Ensure National Security: Prevent foreign powers from influencing Indian institutions.
Maintain Political Neutrality: Stop foreign funding from influencing electoral politics.
Promote Transparency: Ensure foreign funds are utilized only for declared purposes.
Prevent Misuse: Prevent money laundering, conversion for unlawful activities, or activities against national interests.

Designated FCRA Bank Account

Foreign contributions must first be received in a designated FCRA account.
Following the 2020 amendment, this account must be opened at the New Delhi Main Branch of State Bank of India.
Funds may then be transferred to utilization accounts.

Limits on administrative expenses

Initially, NGOs could spend up to 50% of foreign funds on administrative expenses.
After the FCRA Amendment Act, 2020, limit was reduced to 20%.
This was intended to ensure that a larger share of funds reaches beneficiaries.

Important Supreme Court Judgment

In Noel Harper & Others v. Union of India (2002), the Supreme Court upheld the constitutional validity of the 2020 amendments, holding that regulating foreign contributions is necessary to protect national sovereignty and public interest.