What is FCRA? Foreign funding rules for Indian NGOs

The Foreign Contribution (Regulation) Act, 2010, usually called the FCRA, is the law that controls how people and organisations in India accept and use money, goods or securities from foreign sources. An NGO that wants to accept a donation from abroad must first get FCRA registration or prior permission from the Ministry of Home Affairs (MHA), and must then receive, spend and report the money under strict rules.

The FCRA decides whether a gift from a friend in London, a grant from an American foundation or CSR money from a multinational’s Indian arm can be accepted at all. About 14,500 organisations held an active FCRA registration in mid-2026, the MHA estimates.

This guide gives the whole picture for NGO founders, trustees and finance staff, and for the donors and CSR teams who fund them. Each topic has its own detailed guide, listed at the end.

What the FCRA is for

The FCRA is Act No. 42 of 2010. It received the President’s assent on 26 September 2010, replaced the FCRA of 1976, and was amended by Parliament in 2016, 2018 and 2020. The detail sits in the Foreign Contribution (Regulation) Rules, 2011, last amended with effect from 22 June 2026.

Its purpose is to regulate how certain people, associations and companies accept and use foreign contribution and foreign hospitality, and to stop either being used against the national interest. It bars some people and bodies from accepting foreign contribution at all, requires everyone else with a cultural, economic, educational, religious or social programme to get permission first, and controls how foreign money is received, spent and reported.

The regulator is the MHA, through the FCRA Wing of its Foreigners Division. Every application, return and change is filed online on fcraonline.nic.in. The Act applies across India, to Indian citizens outside India, and to the overseas branches and subsidiaries of companies registered in India.

What counts as foreign contribution

Four points follow from the wording and its explanations:

• The currency doesn’t matter. A donation in rupees, handed over in India, is still foreign contribution if the giver is a foreign source.
• Goods count. Equipment, vehicles or medicines from a foreign source are foreign contribution. Gifts for personal use worth up to ₹1 lakh are excluded (Rule 6A).
• Foreign money stays foreign. Money that passes from a foreign source through one or more people remains foreign contribution at every step, and interest earned on it is foreign contribution too.
• Fees and trade aren’t donations. Fees, including fees from foreign students, and payments for goods or services in the ordinary course of business aren’t foreign contribution.

What makes money foreign is who gives it. Foreign sources include foreign governments, foreign companies, foreign trusts and foundations, and any citizen of another country, including people with an Overseas Citizen of India (OCI) card. The United Nations and its specialised agencies, the World Bank and the IMF aren’t, and nor is an Indian citizen abroad giving from personal savings through normal banking channels. Indian companies with foreign shareholders are the hard case: see who counts as a foreign source.

Who needs registration or prior permission

Under Section 11, anyone with “a definite cultural, economic, educational, religious or social programme” may accept foreign contribution only with a certificate of registration or prior permission from the central government. There are two routes:

Our guide to registration and prior permission covers eligibility, documents and the process.

Section 3 bars some people from accepting foreign contribution at all, including election candidates, journalists and owners of registered newspapers and news broadcasters, judges, government servants and (since 2020) all public servants, members of legislatures, political parties and organisations of a political nature that the government notifies. Even they may accept foreign contribution from relatives (Section 4(e)), but anyone who receives more than ₹10 lakh of it from relatives in a financial year must tell the government on Form FC-1 within three months.

The main rules once you have permission

What changed in 2020, and on 22 June 2026

The FCRA Amendment Act, 2020 (assent 28 September 2020) banned transfers of foreign contribution, cut the administrative cap from 50% to 20%, required all foreign contribution to arrive at SBI’s New Delhi Main Branch and let the government require office-bearers’ Aadhaar numbers. The Supreme Court upheld the main changes on 8 April 2022.

The Rules have changed almost every year since. The biggest recent change took effect on 22 June 2026:

• Purposes and states. A certificate now names its purposes, chosen from a schedule of 105, and the states or union territories it covers.
• Form FC-6F. Organisations registered before 22 June 2026 must file it by 21 June 2027 to say which purposes and states they keep.
• A harder renewal test. Renewal needs at least ₹10 lakh of foreign contribution used in the last two financial years.
• Foreign key functionaries. An organisation with foreign nationals, other than those of Indian origin, as key functionaries is ordinarily not eligible.

See the 2020 amendments and what has changed since for the full timeline.

What happens if the rules are broken

Many breaches can be compounded under Section 41: settled by paying an amount set in a table notified on 1 July 2022, instead of facing prosecution. Accepting foreign contribution without permission costs ₹1 lakh or 30% of the amount, whichever is higher; transferring it to another person, ₹1 lakh or 10%, and only once. The amount can’t exceed the foreign contribution received.

Breaches can also lead to suspension for up to 180 days (extendable by 180 more), cancellation after a hearing, a three-year bar on registering again, and the foreign money and the assets bought with it passing to a government authority. The maximum prison term is currently five years. See suspension and cancellation.

FCRA in numbers

Other counts don’t all agree. India CSR, reporting the MHA’s figures to the Joint Parliamentary Committee, gave 14,466 active registrations (29,022 in 2015), 21,983 cancellations and ₹22,974 crore received in 2024-25; another outlet put cancellations since 2015 at 22,496. Say whose figure you use, and when.

FCRA and CSR money

Most CSR money isn’t foreign contribution, because it comes from Indian companies. The FCRA can still apply in two cases:

• The Indian branch or project office of a foreign company. On the FCRA’s definitions, its CSR is given by the foreign company itself, a foreign source.
• An Indian company with substantial foreign ownership. On the shareholding test it is a foreign source only if more than half its share capital is foreign-held and that holding is outside the limits allowed under the Foreign Exchange Management Act, 1999 (FEMA). But the FCRA’s definition of a foreign company also includes a subsidiary of a foreign company, and the MHA hasn’t said how the two fit together.

If CSR money is foreign contribution, the NGO needs FCRA permission, must receive it in its SBI New Delhi account and can’t pass any of it to a partner. NGOs should ask for the company’s written FCRA position; companies should take advice on their own structure. See also how NGOs can get CSR funding.

Do you need FCRA registration at all?

Registration means a bank account in New Delhi, separate books, a CA-certified return every year and a renewal every five years. Since June 2026 it also means a use-it-or-lose-it test: an organisation that hasn’t used ₹10 lakh of foreign contribution over two financial years can’t show the “reasonable activity” that renewal needs, and could face cancellation on the same ground.

So apply only if foreign money is genuinely expected, in amounts that justify the effort. Money from Indian donors, from Indian citizens abroad giving from personal savings, and from Indian companies that aren’t foreign sources needs no FCRA permission.

The FCRA guides

For a structured course that includes a lesson on FCRA, see Starting an NGO in the SocioStory Academy.