FCRA not new, made harsher by UPA govt: India-Italy analyst Lombardi

India-Italy relations analyst Carlo Lombardi highlights that India's FCRA law isn't new, tracing it to Indira Gandhi's era and noting it was made harsher under the UPA. He states NGOs can be foreign policy tools, justifying govt oversight.

'FCRA Not New, Made Harsher by UPA': Analyst

Highlighting that foreign funding regulations in India are not a new phenomenon, Senior Analyst and Advisor, India-Italy relations, Carlo Lombardi, has pointed out that the Foreign Contribution (Regulation) Act (FCRA) was first introduced under the government headed by then Prime Minister Indira Gandhi in 1976 and later the law was made harsher during the Manmohan Singh-led UPA government. Speaking with ANI, Lombardi emphasised that while Non-Governmental Organisations (NGOs) contribute positively to humanitarian causes, they also can frequently function as instruments of a foreign policy, making government oversight of international funding essential.

"Let's not forget that the first FCRA was passed by the Indian Parliament in 1976. It was done by Indira Gandhi. It was then overhauled in 2010 by Manmohan Singh's government, and it was actually harsher in the day. We also have to consider that the technology that is spreading all around the world is making this kind of influence extremely easy. Financial openness also allows for the transfer of funds through many channels that didn't exist in the past. Historically, there's really nothing new," Lombardi stated.

Elaborating on the strategic role played by non-profit entities internationally, the foreign policy expert noted that the concept of utilising non-governmental groups for geopolitical objectives is well-established globally. "My basic point is that NGOs are great; they do a lot of good work for humanity, but they are also an instrument of foreign policy. This is not a secret. In 1983, the National Endowment for Democracy was created in the United States and became the mother of all NGOs. And one of its co-founders, Allen Weinstein, actually went on record in The Washington Post in 1991 saying, 'Much of what the NED, National Endowment for Democracy, does today, the CIA did covertly 25 years earlier.' So, NGOs are also an instrument of foreign policy," he said.

Underlining the necessity for transparency regarding international cash flows entering the country, Lombardi asserted that sovereign governments must ensure foreign money is strictly utilised for its declared objectives rather than driving political agendas. "And it's only right that a government knows who's funding what and for what reasons, and assures that the money which is coming in from foreign NGOs is actually used for the purposes which are stated and not misused. For example, money coming in for educational purposes, and then the NGO uses it for protests against the government, driving a political agenda under the umbrella of charitable, non-profit goodwill organisations," he stated.

Understanding the FCRA Framework

FCRA was first enacted in 1976 during the Emergency imposed by the then Prime Minister Indira Gandhi. The government on Wednesday decided to send the Foreign Contribution (Regulation) Amendment Bill, 2026 to a Joint Parliamentary Committee for closer scrutiny. Minister of State for Home moved the motion in Lok Sabha to send the FCRA Amendment Bill to the JPC. The bill was introduced in the Lok Sabha on March 25 this year.

The Foreign Contribution (Regulation) Act governs the acceptance and utilisation of foreign contribution received from a 'foreign source', as defined in the Act. Foreign contribution may take the form of an article, currency or a foreign security and also includes specified income arising from such contribution. Administered by the Ministry of Home Affairs (MHA), the Act does three things - it identifies who may accept foreign contributions and on what conditions; it specifies how that money must be received, accounted for, and reported; and it restricts a narrow, defined set of foreign-funded activities that could affect India's sovereignty, security or public order.

The law has its origins in 1976 and has been strengthened through successive amendments. The law was replaced with a new law in 2010 which was later amended in 2016, 2018, 2020 and now 2026. FCRA does not impose a general prohibition on foreign donations. It permits eligible associations to receive foreign contribution after obtaining registration or prior permission and requires such contribution to be received, utilised and reported in the prescribed manner.

International Parallels and Current Status

According to an official release, many democracies have also introduced laws to improve transparency and accountability in relation to foreign funding or foreign influence like United States (FARA), Australia (FITS), the United Kingdom (FIRS) and Canada (FITAA), none of which are described internationally as "bans". The scope and legal design of those laws differ from country to country, but they reflect a common concern that cross-border funding and influence should be transparent and subject to appropriate safeguards.

In 2024-25, around 16,200 associations were actively registered and received approximately Rs 22,963 crore in foreign contribution, hardly the footprint of a prohibition. The law is best understood as a registration and disclosure regime for foreign-directed activity, not a permission-to-exist regime for civil society.

Key Amendments and Reforms Over the Years

A 1984 amendment to FCRA made registration with the Home Ministry mandatory for all NGOs receiving foreign funds. The current FCRA, 2010, replaced the 1976 Act with stronger compliance architecture. The 2020 amendment introduced mandatory Aadhaar/passport identification for office-bearers, confined foreign contributions to a single SBI New Delhi account, prohibited sub-granting, cut the administrative-expense ceiling from 50% to 20%, and extended the suspension period. The 2022 Rules raised the limit on contributions from relatives abroad from Rs 1 lakh to Rs 10 lakh. The 2024-25 Rules allowed unspent administrative-expense allocations to be carried forward and strengthened renewal documentation. Each reform has moved in the same direction -- greater disclosure, stronger accountability, and improved governance.

A 1984 amendment made registration with the Home Ministry mandatory for all NGOs receiving foreign funds. The current FCRA, 2010, replaced the 1976 Act with stronger compliance architecture. The 2020 amendment introduced mandatory Aadhaar/passport identification for office-bearers, confined foreign contributions to a single SBI New Delhi account, prohibited sub-granting, cut the administrative-expense ceiling from 50% to 20%, and extended the suspension period. The 2022 Rules raised the limit on contributions from relatives abroad from Rs 1 lakh to Rs 10 lakh. The 2024-25 Rules allowed unspent administrative-expense allocations to be carried forward and strengthened renewal documentation. Each reform has moved in the same direction -- greater disclosure, stronger accountability, and improved governance, the release said.

Under the FCRA amendment Rules of 2026, NGOs renewing FCRA registration must demonstrate that they have utilised at least Rs 10 lakh in foreign contributions over the prior two-year period. The release said that this requirement ensures that live FCRA registrations correspond to active, functioning organisations. It prevents dormant entities from holding registrations and retaining the legal ability to receive foreign funds without undertaking any declared activity. Home Ministry estimates have placed FCRA-registered associations at under 1% of all NGOs operating in India. (ANI)

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