India Updates Framework for Receiving Overseas Funds
Associations must declare specific activities and operational regions; stricter disclosure, utilisation and compliance requirements introduced under amended FCRA rules.
New Delhi, Jun 23: The Centre has introduced significant changes to the Foreign Contribution Regulation Act (FCRA) Rules, requiring non-governmental organisations (NGOs) and associations seeking overseas funding to clearly specify their objectives and geographical areas of operation while strengthening transparency and accountability measures.
According to a gazette notification issued by the Union Home Ministry, organisations applying for registration or prior permission to receive foreign contributions must now select their objectives from a predefined list and identify the states or Union Territories where they intend to carry out activities. These details will form part of the registration certificate.
The amended framework covers activities under religious, cultural, economic, educational and social categories. While several faith-related initiatives remain eligible, the rules stipulate that activities such as religious instruction, preservation of indigenous belief systems and documentation of faith traditions must be undertaken without proselytisation.
The notification also places restrictions on organisations led by foreign nationals. Associations with non-Indian foreign citizens as key functionaries will generally not qualify for registration or prior permission, although the Centre may grant exemptions in specific cases through separate orders.
To enhance oversight, the definition of “key functionary” has been expanded to include company directors, trustees, partners in firms, karta of a Hindu Undivided Family and other individuals exercising managerial control over an organisation.
Existing FCRA-registered entities have been given one year to update the government regarding their approved objectives and operational regions. A new fee structure has also been introduced, with an additional charge of ₹300 for each extra purpose or state added to an application.
The revised rules further require organisations seeking renewal to demonstrate active utilisation of foreign contributions. Registered entities must have spent at least ₹10 lakh on approved activities during the previous two financial years to remain compliant.
For projects operating under prior permission, subsequent instalments of foreign funds will be released only after at least 75 per cent of the previous tranche has been utilised. Authorities may conduct field verification to assess compliance.
In another transparency measure, applicants must disclose their social media accounts and identify the original source of funds when contributions are routed through intermediary remittance channels or donor advised funds.
Annual filings will now include detailed activity reports alongside financial statements. Organisations will also be required to disclose publications produced by them or their office-bearers, in line with restrictions on entities receiving foreign contributions from engaging in news or current affairs broadcasting.
