India Rejects 'Myths' on Foreign Funding Bill, Cites Transparency and Sovereignty
The Indian government has moved to counter criticism of its proposed Foreign Contribution (Regulation) Amendment Bill, 2026, describing the changes as a step toward greater transparency and clearer rules rather than a move to stifle civil society.
In a detailed 'Myth vs. Reality' series on social media platform X, India’s Ambassador to the United States, Vinay Mohan Kwatra, addressed objections raised by a US lawmaker and clarified the bill’s intent.
Mr. Kwatra emphasised that regulating foreign financial flows in public and political spaces is a sovereign function, common in many democracies. He noted that India’s first foreign funding law dates to 1976, with subsequent updates in 2010, 2016, 2018, and 2020. The 2026 bill, he said, continues this evolution with a focus on transparency and better governance.
Contrary to claims that the law would cut off foreign aid to non-governmental organisations (NGOs), the ambassador pointed out that the law does not forbid Indians from receiving foreign donations. He said tens of thousands of associations are registered under the Foreign Contribution (Regulation) Act (FCRA) and routinely receive foreign funds for health, education, disaster relief, research, and humanitarian work.
To illustrate, Mr. Kwatra cited figures showing foreign contributions to registered organisations rose from roughly $1.2 billion in 2010-11 to $2.67 billion in 2024-25. He also noted that India has over three million NGOs, but only 14,450 hold FCRA registration, meaning the vast majority operate entirely outside the act’s scope.
“FCRA does not stop anyone from accepting foreign charity, research grants, or humanitarian aid. It asks three things – register, receive the money through the laid-down process, and report what you did with it,” he explained.
Addressing concerns about asset seizure, Mr. Kwatra clarified that when an organisation’s registration is cancelled or surrendered, foreign contributions and assets created from them already vest in a state government authority – a provision in place since 2010. The 2026 bill, he said, adds a designated authority to safeguard those assets, and provides a way for organisations to reclaim them if they restore their registration.
On places of worship, the ambassador said 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, ensuring continuity of worship.
Mr. Kwatra also rejected allegations that the law targets a specific religion or community. “The Act applies uniformly to all organisations regardless of religion, community, or ideology,” he said. 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.
Finally, the ambassador dismissed the notion that India is an international outlier, citing the US Foreign Agents Registration Act of 1938 and the Foreign Account Tax Compliance Act of 2010 as examples of similar regulatory frameworks in other democracies.
The clarification comes amid broader international scrutiny of India’s legislative processes and its treatment of civil society. The bill is expected to be debated in Parliament in the coming months.
