New NGO funding rules in India: Foreign money for religious conversion banned | WION Decodes

In a major move to tighten oversight on international funding, the Government of India has amended the Foreign Contribution Regulation Act (FCRA) rules, explicitly clarifying that religious conversion will no longer be treated as a legitimate "faith-based" activity.

The amendment aims to eliminate legal grey areas where foreign donations, ostensibly meant for social welfare or religious preservation, were allegedly diverted for proselytisation. Under the updated guidelines, activities like religious education and the preservation of indigenous belief systems remain permissible, but conversion efforts are strictly prohibited from receiving overseas money.

Tighter Compliance and New Restrictions

The 2026 amendment introduces stringent structural changes for non-governmental organisations (NGOs) and religious bodies seeking foreign contributions:

Mandatory Activity Mapping: Organisations must now select their exact operational purpose from a predefined government schedule and specify the precise states or union territories where the funds will be deployed.

Foreign National Restrictions: Associations featuring foreign nationals as key functionaries (excluding Persons of Indian Origin) will ordinarily be barred from obtaining FCRA registration or prior clearance.

Enhanced Audit and Disclosure: The Ministry of Home Affairs (MHA) has mandated granular reporting on ultimate donor identities and reserved the right to conduct ground-level field enquiries to verify fund utilisation.

A 50-Year Regulatory Evolution

This amendment marks the latest chapter in the evolution of the FCRA, which has transformed over the decades from a basic regulatory framework into a highly robust national security tool.

• The FCRA, enacted in 1976, was introduced during the Emergency to curb foreign influence in India’s political, judicial, and democratic institutions.
• In 2010, the original law was replaced with a stricter system requiring mandatory registration renewals for NGOs every five years.
• Later in 2020, amendments banned the sub-granting of funds between NGOs, capped administrative expenses at 20%, and centralised all foreign inflows into a single State Bank of India branch in New Delhi.
• In 2026, the current amendment codifies a strict distinction between preserving faith traditions and active religious conversion.

The government maintains that these measures are essential to safeguard national sovereignty, protect vulnerable communities in tribal areas, and ensure financial transparency. Official statements point to past investigations such as the Caruna Bal Vikas case and probes into specific trusts in Vadodara where funds meant for healthcare or education were allegedly used to induce conversions.

However, the decision has drawn sharp criticism. Several minority-run religious groups and civil society organisations argue that the compliance burden will paralyse legitimate humanitarian work in education and healthcare. Opposition parties have also criticised the move, labelling it an over-centralisation of power designed to stifle independent civil society.