India tightens foreign funding rules for NGOs

India has tightened rules for organizations receiving foreign funds, adding new compliance requirements, limiting registrations by purpose and geography, and defining the kinds of activities that can be carried out under the country’s foreign contribution regime.

The ministry of home affairs notified the Foreign Contribution Regulation Amendment Rules 2026 through an extraordinary Gazette notification dated 22 June. The rules amend the Foreign Contribution Regulation Rules 2011 and take effect from the date of publication in the Gazette.

The changes add a fresh layer of scrutiny for associations, trusts, societies, companies and other entities that receive overseas contributions under the Foreign Contribution Regulation Act, or FCRA.

The law governs how foreign donations can be received and used in India, and has become one of the government’s main tools for supervising foreign-funded civil society work.

The amendments do not merely adjust forms but narrow the operating frame for FCRA-registered entities.

Registration certificates will now specify the purpose or purposes for which registration has been granted, as well as the states or union territories where the association can carry out activities.

Each application for registration must choose its purpose only from the list set out in the schedule attached to the rules.

Existing registered associations have also been brought into the new structure. Any association registered before the start of the 2026 amendment rules must, within one year, submit Form FC-6F to the central government.

The filing must specify the purposes and states or union territories for which it wants to retain its registration.

That is a significant shift. Earlier, an organization’s FCRA registration was tied to broad stated objectives. The new framework makes the permission more specific.

An NGO working across several states or across multiple program categories may now have to map its work more carefully against government-approved labels.

The amended rules also impose additional fees where applications cover more than one state or union territory, or more than one purpose.

The base fee applies to registration for one purpose in one state or union territory. An extra ₹300 will be payable for each additional state or union territory and another ₹300 for each additional purpose.

The schedule of permitted purposes is extensive. It covers religious, cultural, economic, educational and social activities. The religious category is likely to draw particular attention because it lists specific permitted activities, including construction and maintenance of places of worship, preservation of sacred scriptures, support for institutions studying religious philosophy and history, pilgrim amenities, community kitchens under religious auspices, religious education, devotional arts, and preservation of indigenous and tribal faith practices.

Several religious entries expressly exclude proselytization, making the category politically and administratively sensitive.

Foreign-funded religious, charitable and welfare work often overlaps with education, health, food support, community care and social services.

A hospital, school, addiction center or community kitchen run by a faith-based group may sit between more than one category.

The new schedule gives officials a clearer list to apply, but it also gives them more room to ask whether an activity has been correctly classified.

The government has also tightened rules around who may hold controlling roles in recipient organizations.

The amendment says an association having foreign nationals, other than persons of Indian origin, as key functionaries will ordinarily not be considered eligible for registration or prior permission under the Act.

The central government may specify exceptions and conditions by order.

Another major change concerns foreign contributions received through prior permission. An association seeking release of a second or later instalment must apply through a newly inserted Form FC-3BB.

Such instalments will be released only after the association has used 75% of the foreign contribution received in the previous instalment and after a field inquiry into that utilization.

For donors and grantees, that matters. Multi-year projects often depend on timed tranches of funding. The new rule links later disbursements not only to utilization but also to official verification.

That could strengthen accountability in the government’s view. It could also slow project execution if field inquiries take time or vary across jurisdictions.

The rules introduce another test for activity. For the purpose of cancellation under Section 14 and renewal under Section 16, an association will be deemed to have undertaken reasonable activity in its chosen field for the benefit of society if it has used at least ₹10 lakh of foreign contribution in the last two financial years for that purpose.

The expression “reasonable activity” will count only activity undertaken out of, or by using, foreign contribution received in accordance with the Act.

Annual reporting will also get heavier. The amended rules insert a requirement for a detailed activity report alongside existing reporting material.

Forms have also been changed to seek more information, including social media accounts in registration-related filings and details of activities carried out in the previous three financial years.

The Center has also created a formal process for changing the scope of registration.

A registered association that wants to add or delete any purpose, state or union territory from its certificate must apply in Form FC-6F, with a governing body resolution and the prescribed fee.

The central government may approve or reject the application after an inquiry it considers fit.

Large organizations may absorb this through lawyers, compliance teams and consultants. Smaller NGOs may find the change more difficult. Many already run lean teams where the same people manage field programs, donor reports, accounts and government filings.

More detailed forms and narrower classifications mean more administrative work before foreign funds can move into projects.

The amendments come against the backdrop of tighter FCRA enforcement over the past several years. The government has said foreign contributions should not be used in ways that harm national or public interest.

Civil society groups have argued that repeated rule changes, license cancellations and renewal denials have made compliance uncertain and discouraged advocacy, rights-based work and grassroots organizing.

The 2020 FCRA amendments had already restricted sub-granting, required foreign contribution accounts at a designated State Bank of India branch in New Delhi, and reduced the cap on administrative expenses.

The 2026 rules build on that direction, but through more granular controls on purpose, geography, personnel and fund use.

The government is likely to present the changes as a move toward clarity and accountability.