The FCRA noose tightens

A century-old dispute in Kerala’s Saint Thomas Christian community may appear, at first glance, to be a local affair. The long-running feud between factions of the Malankara Church has already seen court interventions, frozen accounts and divided congregations. But today, that dispute is beginning to echo far beyond Kerala, offering an early glimpse into the potential nationwide impact of the Foreign Contribution (Regulation) Amendment Bill, 2026.

For years, several accounts linked to the Malankara Church factions have remained frozen due to ongoing litigation. Affiliated institutions, ranging from churches and seminaries to hospitals and schools, have had to function under a cloud of financial uncertainty. Yet, despite these constraints, both sides had the assurance that their assets, built over decades, through community effort and occasional foreign contributions, would remain under their ownership, subject only to judicial outcomes.

The introduction of the FCRA Amendment Bill, 2026, has unsettled that assumption.

Tabled in Parliament on 25 March, the Bill proposes sweeping changes to the regulatory framework governing foreign contributions. At the heart of the controversy is a provision that allows the Central government to take over assets created using foreign funds if an organisation’s FCRA registration is cancelled, expires, is surrendered, or even if its renewal is delayed.

For organisations entangled in disputes, this provision is alarming. A delay caused by litigation, administrative hurdles, or even technical lapses could potentially lead to state takeover of properties and institutions.

Across India, thousands of NGOs (non-governmental organisations), religious bodies, educational institutions and charitable trusts operate with varying degrees of reliance on foreign contributions.

Many of them do not receive such funds continuously. They may access foreign assistance intermittently — during crises, for specific projects or for limited periods. Organisations often do not prioritise timely renewal of their FCRA registration if they are not receiving foreign funds on a regular basis.

Under the proposed amendments, this pattern could become a vulnerability.

Critics argue that the Bill makes regulatory compliance a Damoclean threat, where procedural delays or lapses, intentional or otherwise, can lead to permanent loss of assets. The other cause for alarm is the concentration of discretionary power in the hands of the executive.

Veteran journalist John Dayal describes the Bill as a ‘draconian measure’, drawing parallels with other contentious laws affecting minority communities. According to him, the FCRA amendments could have a disproportionately adverse impact on Christian institutions, much like the changed Waqf laws affected the assets of Muslim organisations.

The concern, however, is not limited to any one community. Civil society groups working across sectors — in healthcare, education, disaster relief or social welfare — see the Bill undermining their operational autonomy. Many such organisations have built schools, hospitals and community centres through a combination of local contributions and occasional foreign funding. The prospect that these assets could be taken over due to regulatory technicalities has sent ripples of concern through the sector.

Congress MP Manish Tewari has framed the issue in constitutional terms, arguing that the Bill “suffers from serious constitutional maladies”. He points to Article 300A, which guarantees the right to property, and warns that allowing the government to assume control over assets due to procedural lapses undermines this safeguard. In his view, the amendments blur the line between legitimate regulation and excessive state intervention.

Another line of criticism relates to the principles of natural justice. The Bill, it is argued, grants unbridled powers to the state, with insufficient checks against arbitrary or selective action. In a polarised environment, they fear that such powers could be used to target organisations perceived as critical of the government or not aligned with its ideology. The Catholic Bishops’ Conference of India (CBCI) has warned that such powers could have a chilling effect on charitable and religious activities across the country.

At a rally in Kerala on 30 March, Lok Sabha Leader of Opposition Rahul Gandhi said the amendments are designed to redirect the flow of foreign funds in a way that puts independent welfare organisations at a disadvantage while benefiting entities aligned with the ruling establishment. He said the bill places community organisations at the “mercy of the central government,” effectively turning regulation into an instrument of control.

Kerala chief minister Pinarayi Vijayan has also weighed in, stating that the amendments have “generated apprehensions among minority communities”. The existing legal framework has sufficient powers to address misuse of foreign funds, he said. His position reflects a broader concern among states about the concentration of power at the Centre.

To understand the depth of these concerns, it is important to look at the evolution of the FCRA regime. The law was amended in 2010 under the Manmohan Singh government to enhance transparency and accountability. Organisations receiving foreign contributions were required to disclose detailed information about funds received and their utilisation every three months, with this data made publicly accessible.

In 2022, further amendments under the current government introduced a different set of changes, which included some relaxations but also greater central oversight. Critics argue that the 2026 Bill marks a decisive shift towards control rather than transparency, fundamentally altering the balance between regulation and autonomy.

For organisations on the ground, the implications are immediate and practical. Consider a charitable trust that built a rural hospital with some foreign funding a decade ago. If that trust did not renew its FCRA registration because it no longer receives foreign contributions, the new provisions could expose its assets to state takeover. Institutions entangled in legal disputes — like the Malankara Church — are similarly vulnerable.

As Parliament debates the Bill, the central question is: where should the line be drawn between legitimate oversight of foreign funding and the protection of institutional autonomy?

For thousands of organisations across India, the answer to that question may determine not just their compliance obligations but their very survival.