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Foreign Funding Regulation in India - The FCRA 2026 Amendment Explained | FCRA New Rules 2026 | UPSC Current Affairs
Big Update for UPSC GS-2! Ministry of Home Affairs notified Foreign Contribution (Regulation) Amendment Rules, 2026 on 22nd June 2026 & introduced FCRA Amendment Bill 2026 in Lok Sabha on 25th March 2026. Most significant change since FCRA 2010!
What is FCRA?
Foreign Contribution Regulation Act regulates foreign donations to NGOs, Trusts, Societies in India. First passed in 1976, then 2010, amended in 2020, now 2026.
KEY HIGHLIGHTS OF FCRA AMENDMENT RULES 2026:
1. Purpose-Based Registration (Major Change):
Earlier broad registration replaced with purpose-specific licensing. NGOs must select from 105 predefined activities across 5 sectors:
- Religious (16 activities)
- Cultural (18 activities)
- Economic (19 activities)
- Educational (22 activities)
- Social (30 activities)
Proselytisation (Religious Conversion) BANNED. Rs 300 extra fee for each extra purpose.
2. Geographical Restrictions:
Registration will specify States/UTs where the NGO can work. Expansion beyond approved states needs prior MHA approval via Form FC-6F.
3. Stricter Renewal Norms:
- Must utilise a minimum of Rs 10 lakh in foreign funds in the last 2 years to renew
- Must utilise 75% of sanctioned amount before next instalment
- Must disclose social media accounts, websites, books/articles published by NGO & key functionaries
- Foreign nationals as office bearers ordinarily NOT eligible
4. Key Functionary Definition Expanded:
Now includes Directors, Trustees, Partners, Governing Body Members, CEOs, Karta of HUF, anyone with managerial control. Must give ID & compliance details. Personal liability for violation.
5. FCRA Amendment Bill 2026 - Asset Vesting:
Biggest Controversy! New Designated Authority created under Chapter IIIA:
- If FCRA certificate is cancelled / surrendered / Lapses - ALL foreign contributions & assets created (land, building, bank balance) will VEST provisionally in Govt authority
- If registration restored in prescribed period - Assets returned
- If not restored - Assets permanently vest, sale proceeds go to Consolidated Fund of India
- Prevents NGOs continuing via litigation (Deemed Cessation under Section 14B)
- Religious character of place of worship cannot be altered
Why Govt Brought This?
- Transparency & Accountability
- Prevent misuse of foreign funds
- National Security - Stop destabilisation via foreign funding
- 3.7 Million NGOs in India = 29.35% of G20 NGOs
- Foreign funding rose from $1.2 Billion (2010) to $2.67 Billion (2024-25)
Criticism: Opposition & Civil Society, Christian orgs, Amnesty says it curtails Freedom of Association and may affect minority institutions. US also raised concerns.
Global Comparison: Not Unique! US has FARA 1938 & FATCA 2010, UK Foreign Influence Scheme 2025, Australia 2018, Canada 2024, EU legislating.
UPSC Relevance: GS2, Govt Policies, NGOs, FCRA, Fundamental Rights; GS3, internal security, Money Laundering.
Vajirao & Reddy Institute - India's Top Potential Training Institute for IAS | Best Current Affairs for UPSC 2026.
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