India Tightens FCRA Rules, Bans Proselytisation and Limits Foreign Nationals in NGOs

The Union Home Ministry issued a gazette notification amending the Foreign Contribution Regulation Act (FCRA) Rules 2011. NGOs must now select their activities from a predefined schedule covering religious, cultural, economic, educational and social purposes, and explicitly exclude proselytisation from all religious categories. Applications for registration or prior permission must disclose the exact purpose and the states or Union Territories where activities will be carried out; these details will appear on the certificate.

The definition of “key functionary” has been expanded to include directors, partners, trustees, Karta of a Hindu Undivided Family and anyone exercising control. Foreign nationals who are not of Indian origin are ordinarily barred from such positions, though the government may grant exceptions by order. A new fee of Rs 300 applies for each additional purpose or state, and NGOs must have spent at least ₹10 lakh of foreign contributions on approved activities in the preceding two financial years to retain registration. Funds released in instalments require 75 % utilisation of the previous instalment before the next can be disbursed. Penalties for violations have been increased, with fines of Rs 1 lakh or a percentage of the misused amount, and recovery of 100 % of returns.

These changes tighten accountability, restrict foreign influence in NGOs, and set stricter financial and reporting obligations.