New Delhi: The government has proposed greater control over foreign-funded assets if organizations that receive funds from overseas sources lose their registration.
The Foreign Contribution (Regulation) Amendment Bill, 2026, tabled in the Lok Sabha on Wednesday, proposes the creation of a “designated authority” that will take charge of foreign contributions and assets created out of such funds in cases where an organization’s registration is cancelled, surrendered, not renewed, or the entity ceases to exist, according to the draft reviewed by Mint.
The assets will be initially placed under the authority’s control and may be permanently transferred if the organization fails to regain registration within a specified period, it noted.
The authority will also have the power to manage these assets and, if required, oversee the activities of such entities in public interest. It will be responsible for safeguarding and maintaining assets created out of foreign contributions.
The Bill further proposes that such assets may be transferred to a government department or agency or sold, with the proceeds going to the Consolidated Fund of India.
“The proposed amendments appear to be aimed at strengthening oversight of foreign funding and plugging gaps in asset management, particularly in cases where organizations cease to operate,” said Amit Singh, associate professor at the Special Centre for National Security Studies, Jawaharlal Nehru University. “From a security perspective, ensuring better control and traceability of such funds is critical to prevent misuse and align with national interest.”
At present, around 16,000 associations are registered under the Foreign Contribution (Regulation) Act (FCRA) framework, receiving nearly ₹22,000 crore in foreign contributions annually.
According to the Bill, the amendments aim to address operational and legal gaps in the existing law, particularly in the management of foreign contributions and assets, noting that the absence of a comprehensive framework has led to administrative uncertainty and scope for misuse.
The amendments also introduce timelines for receiving and using foreign funds, and provide for automatic cancellation of registration in certain cases. In addition, any investigation under the law will require prior approval from the central government.
Broader liability
The Bill has also expanded the scope of accountability by introducing a broader definition of “key functionaries”. This includes directors, partners, trustees, office bearers and members of governing bodies, as well as any person responsible for managing the affairs of an organization, widening the range of individuals who can be held liable under the law.
The Bill also proposed replacing references to Section 25 of the 1956 Companies Act with Section 8 of the 2013 law, both of which relate to non-profit companies, thereby updating the legal terminology.
It further revises the definition of a “political party” to include not only those registered with the Election Commission under the Representation of the People Act, 1951, but also any group that has fielded candidates in elections, even if not formally registered.
The Bill also plans to introduce a structured framework for handling cases where registration lapses, specifying that FCRA certificates will automatically cease if renewal is not applied for, rejected, or not granted within the validity period.
It also mandates that organizations must fully cooperate with authorities by providing access to records, accounts, and assets, and handing over control when required.
Civil court powers
As per the Bill, the designated authority will be vested with powers similar to a civil court, including summoning individuals, seeking documents and evidence, and overseeing compliance, giving it significant oversight.
In a key change, assets once vested with the authority will be protected from attachment or seizure by courts or other agencies, ensuring exclusive control under the new mechanism, it noted.
The Bill also provides that if an organization becomes defunct or inoperative, its foreign contributions and assets will automatically vest with the designated authority, closing gaps in the earlier framework.
At the same time, the amendments rationalize penalties under the law, reducing the maximum imprisonment term for violations while expanding the scope of accountability through wider definitions.
