Foreign Contribution and Regulations Act (FCRA)

28/08/2022 1 By indiafreenotes

The Foreign Contribution (regulation) Act, 2010 is an act of the Parliament of India, by the 42nd Act of 2010. It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto. It is designed to correct shortfalls in the predecessor act of 1976. The bill received presidential assent on 26 September 2010.


The Minister of Home Affairs, Amit Shah introduced the Foreign Contribution (Regulation) Amendment Bill, 2020, which made several changes to the existing Act, including making it mandatory for office bearers of any non-governmental organisation (NGO) to provide their Aadhaar numbers. It also gives the government the power to hold a “summary enquiry” to prevent an organization from using foreign funds. These changes were intended to increase transparency regarding the use of foreign money for non-governmental organisations.

The Bill was unanimously passed by the Lok Sabha on 21 September 2020. The Rajya Sabha unanimously passed the bill on 23 September 2020.

Amendment 2022

The Centre has also omitted provision ‘b’ in rule 13, which dealt with declaring foreign funds including details of donors, amount received, and date of receipt every quarter on its website. Now only once a year the organizations in FCRA can file the audited balance sheet in the website of the Ministry or also on their own website.


A number of NGOs receiving foreign funding are seen by the India’s central government as involved in anti-development activism and hence posing a negative impact on the economic growth by two to three per cent. An Intelligence Bureau report titled ‘Impact of NGOs on Development,’ claims the NGOs and their international donors are also planning to target many fresh economic development projects.

Home ministry has cancelled some more registrations including top 8 national educational institutions such asJawaharlal Nehru University, IIT-Kanpur and Jamia Milia Islamia saying that these institutes are not maintaining proper FCRA account. So, unless their registrations are restored, these institutions cannot receive contributions from abroad. Later the FCRA status of Jamia Milia Islamia was restored in September 2012 following the submission of its report to the government. The Ministry of Home Affairs has since clarified that Jamia is exempt from all provisions of the FCRA and therefore there is no bar on Jamia to receive/spend foreign contributions.

The Union Home Ministry has cancelled renewal of Foreign Contribution Regulation Act (FCRA) licences of Greenpeace India and two NGOs run by activist Teesta Setalvad who is an Indian civil rights activist and journalist. Greenpeace has been charged with obstructing development activities in India by the Government of India in 2013 (Under congress led UPA government) after intelligence Bureau inputs. Greenpeace India is charged with undertaking protests against thermal power, nuclear power, coal and aluminium mining across the India. GreenPeace has also been charged with promoting Solar energy equipment of US based Zemlin Surface Optical Corporation especially in Bihar. Greenpeace India admitted to anchoring local protests against coal mines and participating in seminars where foreign funding is sought for protests but clarified that the source of funding does not lessen the seriousness of harm to the environment. According to IB (Intelligence Bureau) report, Greenpeace poses threat to national economic security, growing exponentially in reach, impact, volunteers and media influence.

Foreign Source

It includes:

  • Government of any foreign country or any agency of such government;
  • Any international agency except United Nations or any of its specialised agencies, World Bank, International Monetary Fund or such other agency as the Central Government may, by notification in the Official Gazette, specify;
  • Foreign company;
  • Corporation, other than foreign company, incorporated outside India;
  • A multinational corporation;
  • A company where more than 50% of its share capital is held by a foreign government or citizens of a foreign country or foreign entity (includes company, corporations, trusts, societies or other associations of individuals registered in foreign country);
  • A foreign trust or foreign foundation and includes trust or foundation mainly financed by a foreign country and;
  • Citizen of a foreign country.
  • Foreign Trade Union, Society, Club or Other Association.

Restrictions on Accepting FC

The person having a definite cultural, economic, educational, religious or social programme can accept FC, only if:

  • It is registered with the Central Government under this Act or takes prior permission before receiving each contribution.
  • It receives FC only through one designated bank account.
  • Central Government is kept intimated as to the amount, source and manner in which FC was received and utilised.

Prior Permission

  • Application for prior approval to be made in Form FC 4.
  • Prior approval to be donor specific, donee specific and purpose specific.