Accountability and the Architecture of Foreign Funding: Reassessing the FCRA (Amendment) Bill, 2026

Since 2010, India has cancelled somewhere around 22,500 FCRA registrations, with a further 15,000 or so allowed to lapse without renewal. That is a lot of licences pulled. What almost never gets asked, in the noisier corners of the debate, is what actually happens to the buildings, trusts, and bank balances those licences left behind. 

Illustration by The Geostrata

The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha on 25 March 2026 and now listed for the Monsoon Session, tries to answer that question directly by creating a Designated Authority empowered to take custody of assets once a registration is cancelled or simply allowed to expire. The argument today is fairly narrow. A “cancellation-only” regime is an incomplete enforcement tool, and the 2026 Bill is the legislature's attempt to complete it. 

The FCRA, of course, did not arrive fully formed in 2026. It has been tightened in stages since the original 1976 Act, through the 2010 replacement, and then again in 2016, 2018, and 2020, each round narrowing how foreign money can move once it enters India. The 2020 amendments laid the foundation for today's debate.

They stopped NGOs from passing foreign funds to other organisations, required all foreign donations to go through a single SBI account in New Delhi, in addition to making Aadhaar compulsory for office-bearers. The 2026 Bill builds on these changes rather than introducing a completely new approach. Its main focus is on what happens to an NGO's assets after it loses its FCRA licence, an issue that earlier amendments did not address.

WHY CANCELLATION ALONE WAS NEVER ENOUGH

Cancelling a registration ends an organisation's legal permission to receive foreign funds. It does not affect the schools, hospitals, offices, or other assets the organisation has already built. In simple terms, losing the licence does not shut down the organisation's existing infrastructure.

The 2026 Bill tries to address this gap through Section 16A. Once an NGO's FCRA registration is cancelled, surrendered, or expires, any foreign-funded assets temporarily come under the control of a government-appointed Designated Authority. If the NGO fails to regain its registration, the transfer becomes permanent, and the Authority can use or dispose of those assets for public purposes. 

The clearest example of the gap comes from the Greenpeace India file, and it is worth presenting it as a simple timeline, rather than a summary, because the sequence is the point. The Ministry of Home Affairs cancelled Greenpeace India’s FCRA registration in 2015. By 2016, reports spoke of a new body having come into being, apparently able to channel continued foreign funding down a route that the original cancellation order had no power to touch.

The Enforcement Directorate was carrying out searches under FEMA and PMLA in 2018, three years after the licence itself had already switched off. 

Three different enforcement actions, three different years, one underlying organisation which, on paper, had ceased to have any authorisation to exist in its old form. The gap between 2015 and 2018 is a tale of a regulator learning on the spot that a licence cancellation and an operational shutdown are not the same thing. This is in line with the government’s enforcement logic that you can’t close a loophole with a licence cancellation if the infrastructure built with foreign money outlives the licence. Almost as if this very episode was legislatively assigning homework to Section 16A’s vesting provisions.

ADDRESSING THE COUNTER-NARRATIVE

None of this means the Bill has had an easy ride, and a fair account must sit with the objections rather than wave past them. The Bill has already been deferred once by the Parliament, after pushback from civil society groups and religious organisations. The Kerala assembly passed a resolution demanding its outright withdrawal. The worry from Amnesty International, three UN special rapporteurs, and Christian missionary organisations was over the accompanying rules' bar on 'proselytisation' as a registered activity. 

The strongest technical objection, and the one worth taking most seriously, comes from the Financial Action Task Force, whose 2024 evaluation of India recommended a risk-based approach aimed at organisations demonstrably exposed to terrorism financing, alongside genuine consultation with the nonprofit sector, rather than the alleged sector-wide restrictions the 2026 Bill imposes. 

The Bill also raises concerns about due process, which are worth getting addressed, as they would promise smoother execution in the future. Under the proposed law, an NGO's foreign-funded assets can come under government control when its FCRA registration is cancelled or expires, even if no wrongdoing has been proven.

This means an organisation will face heavy consequences simply for missing a renewal deadline.

For example, even a rural library built with foreign funding could lose its assets without any finding of misuse. These are not frivolous complaints, and an honest reading of the Bill has to hold the FATF's proportionality concern and the Greenpeace enforcement gap in the same hand, rather than picking whichever one is convenient.

THIS IS A GOVERNANCE QUESTION

Put the pieces together, and what is actually being argued about becomes clearer than what the headlines have been suggesting. The technical question underneath all of this is institutional. About who should hold custody of foreign-funded assets in the gap between a cancellation order and a final resolution, and under what safeguards? That is the same category of question insolvency law asks about receivership, or that banking regulation asks about a moratorium, and it gets answered through procedural detail.

How fast is judicial review of a Designated Authority's decision? Is there a threshold that protects small, functioning institutions like the rural libraries, for example, above, from automatic vesting? Are disposal criteria published and applied uniformly, or discretionary and case-by-case? Answer those questions well, and you have solved an administrative problem.

Answer them badly, and you have handed a state agency a tool that can be pointed. Both outcomes are possible from the same statutory text, and which one you get depends entirely on drafting and implementation, which is exactly why this belongs in the governance column rather than the culture-war column.

Designated Authority decisions should carry statutory timelines and a genuine right of judicial appeal, and not a discretionary one.

Periodic audit, by Parliament or the CAG, of what actually happens to vested assets over time would give the public a way to check whether the mechanism is being used as designed. And sector-specific guidance for hospitals, schools, and research institutions, the sort of organisations the rural library example represents, would prevent a proportionality problem being written into the base case rather than treated as an edge case.

Since 1976, the issue of whether foreign contributions to India should be regulated has been settled. What the 2026 Bill really does is bring back the table far more limited. How good is the mechanism for dealing with what foreign money built, once the permission that let it in has been withdrawn?

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BY ARYAVEER SHARMA

COVERING PRIME MINISTER (CPM)

TEAM GEOSTRATA

info@thegeostrata.com