MAINS Current Affairs includes FCRA Amendment Bill, 2026: India’s NGOs at a New Funding Crossroads & India’s Counter-Terror Strategy

Polity and Governance

1. FCRA Amendment Bill, 2026: India’s NGOs at a New Funding Crossroads

Context: The proposed Foreign Contribution Regulation Amendment Bill, 2026 seeks to introduce changes in the regulation and management of foreign-funded assets belonging to NGOs and associations whose FCRA registration has ceased, been surrendered or not renewed.

• The Bill is currently being examined by a Joint Parliamentary Committee (JPC) amid concerns and opposition from sections of civil society and political stakeholders.

About Foreign Funding to NGOs

• Foreign contributions received by NGOs and other eligible organisations are primarily governed by the Foreign Contribution (Regulation) Act (FCRA), 2010, which replaced the FCRA, 1976.
• Foreign contribution broadly covers donations, transfers and other receipts originating from foreign sources.
• NGOs and other eligible entities generally require FCRA registration or prior permission to legally receive foreign contributions.
• The regulatory framework seeks to ensure that foreign funds do not adversely affect:
  • National interest;
  • Sovereignty and integrity;
  • Security; or
  • Public order.

Why Does Foreign Funding Matter?

• Foreign assistance has played a significant, though mixed, role in India’s voluntary and non-governmental sector.
• Research cited in Foreign Aid for Indian NGOs: Problem or Solution? highlights several potential benefits of foreign funding, including:
  • Introduction of new ideas, technologies and organisational practices;
  • Capacity building and greater professionalisation;
  • Support for health, education and social-welfare programmes; and
  • Greater flexibility compared with some conventional government funding mechanisms.
• At the same time, excessive dependence on external donors can influence an organisation’s priorities and raise concerns regarding donor accountability and institutional autonomy.
• Therefore, the central issue is not simply foreign funding versus no foreign funding, but ensuring transparent funding while maintaining institutional independence.

Key Legislative Measures Relating to Foreign Funding

1. FCRA, 1976

• Introduced against the backdrop of concerns that foreign money could influence India’s political and social processes.

2. FCRA, 2010

• Replaced the 1976 legislation.
• Established a more comprehensive framework for regulating the receipt and utilisation of foreign contributions.

3. FCRA Amendment, 2020

• Strengthened compliance requirements.
• Introduced restrictions relating to:
  • Transfer of foreign contributions; and
  • The proportion of foreign contributions that could be used for administrative expenses.

4. FCRA Amendment Bill, 2026

• Proposes further provisions dealing with foreign contributions and assets created from such contributions when an organisation’s FCRA registration ceases.

What Does the Proposed FCRA Amendment Bill, 2026 Seek to Change?

• One of the significant proposals concerns the handling of foreign contributions and assets created using such contributions when an organisation’s FCRA certificate is:
  • Cancelled;
  • Surrendered; or
  • Allowed to lapse.

Proposed Mechanism

• Such foreign-funded **funds and assets would initially vest in a government-appointed designated authority.
• If the organisation’s registration is restored within the prescribed period:
  • The assets and unused foreign contribution may be returned to the organisation.
• If a fresh FCRA certificate is not obtained within the prescribed period:
  • The assets may be sold or transferred to a government department.
• The proceeds generated from such disposal would be credited to the Consolidated Fund of India.
• The Bill also provides for revision and appeal before the District Judge.
• The proposed mechanism is intended to prevent foreign-funded assets from remaining outside effective regulatory oversight after an organisation loses its FCRA status.

Key Concerns Relating to Proposed Changes

1. Impact on Civil Society

• Civil-society organisations have expressed concerns that stricter regulation could discourage legitimate NGOs and potentially reduce the space available for independent social action and advocacy.

2. Religious Neutrality

• Some organisations are concerned that the proposed framework could have a disproportionate impact on groups working in areas associated with religious minorities.
• The government, however, has highlighted concerns about the potential misuse of foreign contributions, including for proselytisation.

3. Impact on Welfare Delivery

• Numerous NGOs operate:
  • Schools;
  • Hospitals;
  • Old-age homes; and
  • Rural-development programmes.
• In some Northeastern and tribal areas, such organisations may constitute important providers of essential social services.
• Disruption of their operations could therefore have consequences for vulnerable communities.

4. Property Rights and Proportionality

• Automatic or prolonged vesting of foreign-funded assets raises questions concerning:
  • Due process;
  • Property rights;
  • Proportionality; and
  • Availability of effective legal remedies.
• These concerns become particularly relevant where registration is cancelled or lapses because of regulatory or compliance-related reasons.

Other Issues & Concerns

• According to the figures cited, 22,496 NGO registrations have reportedly been cancelled since 2015, leaving approximately 14,466 active registered associations eligible to receive foreign contributions.
• Meanwhile, India’s domestic philanthropic ecosystem is expanding.
• Private philanthropy was projected at around ₹1.43 lakh crore in FY2025.
• Retail giving was estimated at approximately ₹37,000 crore annually.
• CSR expenditure by listed companies reportedly reached ₹22,563 crore in FY2025, representing a 5% increase.
• Despite this expansion, the demand for social-sector funding continues to exceed available resources.
• Newer philanthropic flows are increasingly being directed towards areas such as:
  • Scientific research;
  • Higher education; and
  • Ecosystem development,

rather than only traditional welfare programmes.

Way Forward: Balanced FCRA Framework

India needs a regulatory framework capable of simultaneously safeguarding national security, financial transparency and democratic civil society. The following measures can help achieve this balance:

• Uniform and religion-neutral application: FCRA provisions should be applied consistently without discriminatory treatment based on religious identity or affiliation.
• Risk-based regulation: Strengthen risk-based auditing and compliance monitoring instead of relying on blanket restrictions.
• Due process and remedies: Ensure timely notice, opportunity for hearing and effective appellate mechanisms before the permanent vesting or disposal of assets.
• Greater transparency: Strengthen digital disclosure mechanisms relating to the receipt, utilisation and beneficiaries of foreign contributions.
• Diversification of funding: Encourage domestic philanthropy, CSR and community-based giving to reduce excessive dependence on foreign sources.
• Government–civil society dialogue: Establish constructive engagement among the government, donors and civil-society organisations to address compliance concerns while protecting legitimate social-sector activity.

Conclusion

• A vibrant democracy requires both accountable governance and an independent civil society.
• Foreign funding should neither be viewed as inherently beneficial nor inherently harmful. The key objective should be to prevent illicit or destabilising foreign influence while protecting legitimate organisations that contribute to public welfare.
• A stronger domestic philanthropic ecosystem can gradually reduce excessive dependence on foreign assistance while preserving the pluralism, institutional autonomy and civic participation essential for India’s democratic development.

Security

2. India’s Counter-Terror Strategy

Context: Terrorism has undergone a significant transformation, moving from large, centrally controlled organisations towards decentralised networks and smaller cells.

• Terrorist groups increasingly exploit drones, cyber tools, encrypted communication, social media and emerging technologies, requiring India to adopt a comprehensive and technology-enabled counter-terrorism strategy.

Evolution of Terrorism

1. From Hierarchical Organisations to Decentralised Cells

• The 9/11 attacks of September 2001 marked a major turning point in global counter-terrorism.
• Over subsequent decades, the influence of highly centralised terrorist organisations weakened, while smaller autonomous groups and lone-wolf actors became increasingly significant.
• Figures such as Osama bin Laden and Abu Bakr al-Baghdadi represented major phases of this evolution, alongside the emergence of decentralised terrorist cells.

2. Technology as a Force Multiplier

• Terrorist organisations increasingly use:
  • Drones;
  • Encrypted communication;
  • Social media and instant-messaging platforms;
  • Dark web networks;
  • Cryptocurrency wallets; and
  • Cyber capabilities.
• These technologies can facilitate recruitment, radicalisation, propaganda, financing and operational planning.
• The Ministry of Home Affairs’ National Counter-Terrorism Policy & Strategy (PRAHAAR) identifies emerging risks associated with:
  • Robotics;
  • Cyber-attacks; and
  • CBRNED threats — Chemical, Biological, Radiological, Nuclear, Explosive and Digital threats.

India’s Early Experience

1. Multiple and Evolving Threats

• Cross-border terrorism in Jammu and Kashmir intensified during the early 1990s.
• The 1991 assassination of Rajiv Gandhi by the LTTE at Sriperumbudur demonstrated that India’s terrorism challenge extended beyond Kashmir.
• The 1993 Mumbai serial blasts and the IC-814 hijacking in December 1999 brought the Pakistan connection into sharper focus.
• During the IC-814 crisis, India released terrorists including Ahmed Omar Sheikh and Masood Azhar in exchange for more than 160 hostages.

2. Parliament Attack and Operation Parakram

• The Parliament attack of December 2001, attributed to Pakistan-based Jaish-e-Mohammed (JeM), resulted in Operation Parakram.
• The operation involved large-scale military mobilisation and highlighted the security and escalation challenges associated with responding to cross-border terrorism.

3. Major Terrorist Attacks

• Other major terrorist incidents included:
  • Red Fort attack — 2000;
  • Akshardham attack — 2002;
  • Delhi serial market blasts — 2005;
  • Varanasi attacks — 2006;
  • Delhi blasts — 2008;
  • German Bakery attack, Pune — 2010; and
  • Delhi High Court blast — 2011, which resulted in 15 deaths.
  • Nuclear deterrence and the risk of escalation also created constraints on India’s military options, leading to international diplomatic intervention and eventual disengagement after nearly two years.

India: From Strategic Restraint to Cross-Border Strikes

1. Uri and Surgical Strikes

• The Uri terrorist attack in September 2016, attributed to JeM terrorists, was followed by Indian surgical strikes across the Line of Control (LoC).
• The strikes targeted terrorist launch infrastructure across the LoC and represented a shift towards a more proactive response to cross-border terrorism.

2. Pulwama and Balakot

• Following the Pulwama attack on a CRPF convoy in February 2019, the Indian Air Force conducted strikes against a JeM camp at Balakot.
• This represented the first Indian Air Force strike across Pakistani airspace against a terrorist target, according to the source.

3. Pahalgam and Operation Sindoor

• The Pahalgam terror attack in April 2025 was followed by Operation Sindoor.
• India’s counter-terrorism approach has consequently evolved from predominantly diplomatic and defensive responses towards a combination of:
  • Intelligence-led prevention;
  • Stronger internal security mechanisms; and
  • Calibrated cross-border action.

Related Efforts & Initiatives

Global Measures

• UN Security Council counter-terrorism mechanisms and terrorist-designation regimes provide an international framework for combating terrorism.
• International cooperation focuses on:
  • Terror financing;
  • Extradition;
  • Intelligence sharing; and
  • Disruption of terrorist networks.

Financial Action Task Force (FATF)

• Since joining the FATF in 2010, India has actively used the platform to strengthen international efforts against terror financing.
• India has also sought greater international attention towards state-sponsored terrorism.

No Money for Terror Ministerial Conference

• Through the No Money for Terror Ministerial Conference (2018–19), India advocated:
  • Early adoption of the UN Comprehensive Convention on International Terrorism (CCIT); and
  • Impartial and non-politicised implementation of FATF standards.

Coordination with INTERPOL: BHARATPOL

• The BHARATPOL portal connects the CBI, India’s National Central Bureau for INTERPOL, with law-enforcement authorities across India through a common platform.
• It facilitates cooperation in areas including:
  • Transnational organised crime;
  • Narcotics trafficking;
  • Arms trafficking;
  • Cybercrime;
  • Economic fraud;
  • Child sexual exploitation material; and

India’s Emerging Comprehensive Approach & Strategy

1. Unlawful Activities (Prevention) Amendment Act, 2019

• The amendment strengthened India’s anti-terror legal framework by expanding the powers available to the Central Government and investigative agencies in dealing with terrorism.

2. National Investigation Agency Amendment Act, 2019

• The amendment expanded the NIA’s jurisdictional mandate.
• It enables investigation of certain terror-related offences committed outside India against Indian interests.

3. Strengthening of PMLA Provisions

• Strengthened provisions under the Prevention of Money Laundering Act (PMLA) have provided the Enforcement Directorate with greater tools to:
  • Trace;
  • Freeze; and
  • Confiscate

assets linked to terrorist financing and related activities.

4. Bharatiya Nyaya Sanhita (BNS), 2023

• The new criminal law framework has, for the first time, specifically incorporated definitions relating to terrorism and organised crime and provides for stringent penalties for such offences.

5. Arms (Amendment) Act, 2019

• The amendment strengthened India’s response to terrorism, insurgency and organised crime, particularly by addressing illegal arms networks.

National Counter-Terrorism Policy & Strategy — PRAHAAR

• PRAHAAR provides a comprehensive framework for India’s counter-terrorism response.
• Its approach is based on seven broad pillars:

1. Prevention of terrorist attacks.
2. Swift and proportionate response to terrorist incidents.
3. Aggregation of internal capacities through whole-of-government coordination.
4. Protection of human rights and adherence to rule-of-law-based processes.
5. Addressing conditions that contribute to radicalisation.
6. Strengthening international cooperation.
7. Recovery and resilience through a whole-of-society approach.

• The strategy focuses not only on terrorists themselves but also on the wider ecosystem involving:
  • Terror financiers;
  • Facilitators;
  • Over-ground workers (OGWs);
  • Weapons networks; and
  • Digital propaganda systems.
• It emphasises coordination among intelligence agencies, State police, Central Armed Police Forces (CAPFs), NIA and NSG.

Way Forward

• Strengthen real-time intelligence fusion among the Centre, States and various security agencies.
• Develop more uniform counter-terrorism and anti-terrorism squad (CT/ATS) structures, resources, training and investigation capabilities across States and UTs.
• Improve capabilities for counter-drone operations and AI- and cyber-enabled threat detection.
• Strengthen domestic and international cooperation to identify and disrupt terror financing networks.
• Invest in de-radicalisation, counter-narratives, education and community engagement, while ensuring protection of constitutional rights.
• Improve the quality of investigation and prosecution through early involvement of legal experts.
• Deepen international cooperation against:
  • Terrorist safe havens;
  • Terror financing;
  • Illegal weapons networks; and
  • Digital ecosystems supporting terrorism.
• Maintain an appropriate balance between national security, proportionality, human rights and the rule of law.

Conclusion

• Twenty-five years after 9/11, terrorism has not disappeared; instead, it has become increasingly fragmented, technology-driven and transnational.
• India’s counter-terrorism architecture is therefore evolving from a largely reactive model towards an integrated framework combining:
  • Prevention;
  • Intelligence;
  • Rapid response;
  • International cooperation;
  • De-radicalisation; and
  • Societal resilience.
• This integrated approach reflects the core logic of PRAHAAR, which seeks to address not only terrorist attacks but also the broader networks, financing channels, technologies and social conditions that enable terrorism.

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