The government is set to tighten the rules governing how Indian entities, individuals, and non-government organisations (NGOs) receive, use and create assets from foreign contributions.
According to the Foreign Contribution (Regulation) Amendment Bill, 2026, a designated authority will be set up which will take charge of foreign contributions and assets in cases where an organisation’s registration is cancelled, surrendered or lapses. Under such circumstances, assets created out of foreign funds could be taken over, managed, or even disposed of by the authority in accordance with prescribed rules. This marks a shift from the current system, which lacks a structured mechanism for handling such situations.
The Bill is likely to be tabled in Parliament on Tuesday.
Assets created from foreign funds to not be be sold without govt approval?
Furthermore, it is proposed that assets created from foreign funds cannot be sold without government approval. On cancellation of registration of the entities concerned, assets provisionally/permanently vest in the government authority. The government can transfer assets to agencies or sell them and credit money to the Consolidated Fund of India.
The Foreign Contribution (Regulation) Act, 2010, governs the receipt and use of foreign funds to safeguard national interest, public order and security. Around 16,000 organisations are currently registered under it, receiving nearly Rs 22,000 crore annually.
However, gaps have emerged, particularly in managing funds and assets when registrations lapse or are cancelled. The absence of a clear framework has led to uncertainty and possible misuse
“It is therefore proposed to amend the Act to introduce a comprehensive statutory framework for vesting, supervision, management and disposal of foreign contribution and assets through a Designated authority, including provisional and permanent vesting; to provide timelines for receipt and utilisation under prior permission; to provide for cessation of certificate; to regulate handling of assets during suspension; to rationalise penalties; and to require prior approval of the Central Government for initiation of investigation,” according to the Statement of objectives and reasons of the Bill.
The Bill also introduces the concept of automatic cessation of registration if it is not renewed within the stipulated time, removing ambiguity around the legal status of organisations. In addition, it places stricter conditions on the use of funds, including limits on how assets can be transferred or utilised, particularly during periods of suspension.
Accountability provisions have been strengthened by clearly defining “key functionaries” and extending liability to them in cases of violations. At the same time, the proposed law reduces the maximum term of imprisonment for offences, signalling a move towards a more compliance-driven regime rather than a purely punitive one. Another significant provision requires prior approval of the Central Government before any investigation can be initiated, a step intended to prevent overlapping or excessive scrutiny.
While the amendments are designed to enhance transparency and safeguard national interests, they have also sparked debate over increased centralisation and the potential impact on the functioning of non-governmental organisations.