Regulating foreign funds sovereign step; US has similar laws: Kwatra

India's Ambassador to the US, Vinay Mohan Kwatra, has stated that the amendments to the Foreign Contribution Act are designed to increase transparency and require organizations to receive money through a specific process. Kwatra emphasized that regulating foreign financial flows in public and political spaces is a sovereign duty rooted in national security concerns, citing similar laws in the US since 1938 and in Australia and Canada.

He noted that the UK's scheme became effective in July 2025, and the EU is currently drafting legislation.

Kwatra addressed concerns raised by a US lawmaker about the potential for the Indian government to take control of churches and charities under the FCRA amendments. He clarified that when a registration is cancelled or surrendered, assets created from foreign contributions already belong to a state government authority since 2010.

However, the 2026 Bill introduces a designated authority to manage these assets and ensure their return if the organization reinstates its registration. He assured that places of worship would retain their religious character under the new law.

Kwatra dismissed worries that the new law would cut off foreign aid to civil society, emphasizing that over three million NGOs in India routinely receive foreign funds for health, education, disaster relief, research, and humanitarian work. He pointed out that only a small fraction, 14,450, hold FCRA registration, meaning the vast majority of civil society organizations are exempt from the Act.

Kwatra highlighted that India has been regulating foreign contributions through the FCRA since 1976, with amendments in 2010, 2016, 2018, and 2020 to strengthen the framework.

He reiterated that regulating foreign financial flows in public and political spaces is a sovereign measure driven by national security concerns, a norm in many democracies worldwide. Kwatra also refuted claims that the FCRA amendments targeted a specific community, stating that the Act applies equally to all organizations regardless of religion, community, or ideology.

He affirmed that faith-based welfare activities, including religious education and maintenance of places of worship, remain eligible for foreign funding under the FCRA.