FCRA ‘myths’ debunked: Bill aims for transparency, not a foreign funding crackdown, says envoy

Washington: India's Ambassador to the US Vinay Mohan Kwatra has defended the amendments to the Foreign Contribution (Regulation) Act, saying the changes are intended to improve transparency and ensure that organisations receive foreign funds through a clearly defined process.

In a series of posts on X on Sunday, Kwatra said regulation of foreign financial flows in public and political spaces was a sovereign measure driven by national security concerns. He also pointed to similar laws in several other countries, including the US.

"The US has had FARA (Foreign Agents Registration Act) since 1938 and FATCA (Foreign Account Tax Compliance Act) since 2010. Australia legislated in 2018, Canada in 2024. The UK's scheme came into force in July 2025. The EU is legislating now," he said.

Kwatra's remarks came days after a US lawmaker raised concerns over the FCRA amendments, alleging that the changes could allow the Indian government to take control of churches and charitable organisations.

Addressing concerns over the management of assets after an organisation loses its FCRA registration, Kwatra said foreign contributions and assets created from them already vest in a state government authority when registration is cancelled or surrendered, under a provision that has been in force since 2010.

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

He also said places of worship have specific safeguards under the proposed framework.

"Places of worship carry their own protection. Where a cancelled association has created property connected to a place of worship, that property goes to another FCRA-registered association of the same faith to ensure continuity of worship," he said.

Kwatra rejected concerns that the amendments were intended to restrict foreign assistance to civil society organisations.

"Tens of thousands of associations are registered under FCRA and routinely receive foreign funds for health, education, disaster relief, research and humanitarian work," Kwatra said.

India has more than three million NGOs, but only 14,450 have FCRA registration, he said.

"Thus, the overwhelming majority of civil society organisations are entirely outside the Act," Kwatra said.

The ambassador noted that India first enacted the FCRA in 1976 and introduced a more modern framework through amendments in 2010. The law was subsequently strengthened through amendments in 2016, 2018 and 2020.

"The 2026 Bill and Rules are the next step in the same direction: more transparency, better governance, clearer rules," he said.

Kwatra reiterated that regulation of foreign financial flows in public and political spaces was a sovereign decision linked to national security.

"It is an accepted feature of modern governance in many democracies around the world," he said.

Rejecting claims that the amendments were aimed at any particular religious community, Kwatra said the law applied equally to all organisations.

"Nothing could be farther from it. The Act applies uniformly to all organisations regardless of religion, community or ideology. Faith-based welfare activities, including religious education, maintenance of places of worship, and charitable work by organisations of every faith, continue to be eligible for foreign funding," he said.

The FCRA Bill, 2026 proposes empowering the government to establish a "Designated Authority" to take over the management of foreign contributions and assets created using such funds when an organisation's FCRA registration is cancelled, surrendered or ceases because it is not renewed.

The proposed legislation also says that when such assets include a place of worship, the Designated Authority must ensure that its religious character is preserved.