Better Governance, Clearer Rules: India’s Mythbuster On Foreign Funding Bill

Washington:

Amid the controversy surrounding the Foreign Contribution (Regulation) Amendment Bill (FCRA), 2026, India has addressed objections raised by a US lawmaker, saying the amendments to the foreign funding legislation are aimed at improving transparency, making way for better governance, and clearer rules.

In a series of posts on X, India’s ambassador to the United States, Vinay Mohan Kwatra, also issued a detailed “Myth vs. Reality check” on the bill.

“There are many misunderstandings in the media and in civil society about the proposed Foreign Contribution (Regulation) Amendment Bill (FCRA), 2026. Here is the Myth vs. Reality check,” he wrote on X. 

The Myth vs. Facts

Rejecting claims that India was framing a new law to cut off foreign aid to civil society, Katwa pointed out that the regulation of foreign financial flows in public and political spaces is a sovereign step driven by national security concerns. 

There are many misunderstandings in the media and in civil society about the proposed Foreign Contribution (Regulation) Amendment Bill(FCRA), 2026.
Here is the Myth vs. Reality check.

— Amb Vinay Mohan Kwatra (@AmbVMKwatra) August 10, 2026

“It is an accepted feature of modern governance in many democracies around the world. The first FCRA in India came in 1976. It was replaced in 2010 with a more modern framework and strengthened by amendments in 2016, 2018, and 2020. The 2026 Bill and Rules are the next step in the same direction: more transparency, better governance, and clearer rules,” he said. 

“The fact is that the law does not forbid Indians from receiving foreign donations or shut down law-abiding civil society. Tens of thousands of associations are registered under FCRA and routinely receive foreign funds for health, education, disaster relief, research, and humanitarian work,” the diplomat added. 

Kwatra dismissed the claims that the FCRA had adversely affected NGOs (non-governmental organisations) and charitable groups and that the latest amendment would impose further restrictions on their operations.

He said foreign contributions received by registered organisations had risen from roughly $1.2 billion in 2010-11 to $2.67 billion in 2024-25.

India has over 3 million NGOs, and the diplomat noted that a bare fraction of these, only 14,450, hold FCRA registration. Thus, the overwhelming majority of the civil society organisations are entirely outside the Act,” he said. 

“FCRA does not stop anyone from accepting foreign charity, research grants, or humanitarian aid,” Kwatra said. “It asks three things–register, receive the money through the laid-down process, and report what you did with it.”

The ambassador also addressed concerns that the amendment would result in the seizure of assets belonging to NGOs, religious charities, places of worship, hospitals, schools, and other organisations dependent on foreign donations.

When an organisation’s registration is cancelled or surrendered, foreign contributions and assets created from them already vest in a state government authority, he said. That provision has been in force since 2010.

“What the 2026 Bill adds is a designated authority to safeguard those assets — and a way back,” Kwatra said. “If the organisation restores its registration, all assets and unused funds are returned in full.”

Places of worship would have separate protection. Property linked to a place of worship and created by an association whose registration had been cancelled would be transferred to another FCRA-registered association of the same faith to ensure continuity of worship, he said.

Kwatra further rejected allegations that the law specifically targeted a religion or community.

“Nothing could be farther from it,” he said. “The Act applies uniformly to all organisations regardless of religion, community, or ideology.”

Faith-based welfare activities, religious education, maintenance of places of worship, and charitable work by organisations of every faith would remain eligible for foreign funding, he added.

The ambassador also rejected the contention that India was an international outlier. He cited the US Foreign Agents Registration Act of 1938 and the Foreign Account Tax Compliance Act of 2010, along with legislation adopted by Australia in 2018 and Canada in 2024. He said the UK’s scheme took effect in July 2025, while the European Union was considering legislation.

The FCRA regulates the acceptance and use of foreign contributions by individuals, associations, and companies in India. Organisations covered by the law must secure registration or prior permission and comply with prescribed banking, accounting, and reporting requirements.

US Criticism 

The mythbuster came after several lawmakers from the Democratic and Republican parties, including Senator James Risch, who heads the Senate Foreign Relations Committee, voiced concerns over the planned changes to the FCRA, saying they could adversely impact Christian organisations and other civil society groups.

Republican Congressman Riley Moore alleged that the proposed amendments to the FCRA would “permit government takeovers of churches and religious charities.” 

“This is a clear attack against Christians. If this bill proceeds in this way, it would be a point of major concern in our bilateral relationship with India,” he said on social media.

About the Bill

The Foreign Contribution (Regulation) Amendment Bill 2026 was introduced in the Lok Sabha on March 25. The bill provides for a comprehensive framework for vesting, supervision, management, and disposal of foreign contributions and assets in a ‘designated authority,’ including provisional and permanent vesting.

India’s Stand

India last week rejected criticism by several US lawmakers over proposed changes to FCRA, describing the legislative matter as an internal affair. Foreign ministry spokesperson Randhir Jaiswal said the proposed changes to the FCRA are an internal legislative issue of India.

“We have seen the comments (critical of the proposed changes). Legislative matters concerning India are our internal affairs, on which decisions are taken by the Parliament of our country,” Jaiswal said in his bi-weekly media briefing.

“I would also like to point out that there are several nations, including the United States, which regulate the flow of foreign funds,” he said.