India's FCRA Amendment — From Regulating Inflows to Regulating Stock Assets, the Fight over Religious Property

On March 25, 2026, the Modi government introduced an amendment to the Foreign Contribution (Regulation) Act (FCRA) in the Lok Sabha. On the surface, it is a routine patch to plug loopholes in foreign-funding oversight; in substance, it extends the Indian government's grip on foreign contributions from "regulating inflows and eligibility" to "regulating stock assets." Once an organization's foreign contributions have been used to build a hospital, a school or even a place of worship, those assets themselves can become subject to takeover by a government-designated authority.

What the Amendment Actually Changes

The 2010 FCRA already provided that, once an organization's FCRA registration was cancelled or voluntarily surrendered, its unused foreign contributions and the assets built from them could be taken over by a government-designated authority. The 2026 amendment adds two new triggers on top of that base: failure to renew an expired registration, and rejection of a renewal application. It also creates a "designated management authority" empowered to provisionally take over and administer the relevant foreign funds and any assets built wholly or partly from those funds. If the organization restores its registration within the prescribed window, the funds and assets are to be returned; if restoration fails over the longer term, the assets can be placed under permanent management by the designated authority — used for public purposes, transferred to a government department, or disposed of by lawful sale.

The short version: the old law regulated "how the money is spent"; the new law regulates "who owns the building that the money paid for."

Where the Controversy Comes From

A large number of Indian churches, schools, hospitals and charitable institutions have long relied on overseas religious and philanthropic funding, and many of their fixed assets were themselves built with foreign contributions. The Communist Party of India (Marxist), the Indian National Congress and the Catholic Bishops' Conference of India have all raised the concern that, once the central government refuses to renew or cancels an FCRA permit, the designated authority could effectively take control of the relevant hospitals, schools and even places of worship — exerting a structural pressure on minority religious and civil-society organizations.

The controversy quickly spilled over into diplomacy. In May, U.S. Representative Chris Smith publicly asked Secretary of State Marco Rubio to raise the issue with the Indian government during a visit to India, arguing that the amendment could have a disproportionate impact on Christian charities and churches; senators including James Risch, the chairman of the Senate Foreign Relations Committee, subsequently voiced similar concerns. The dispute thus escalated from an Indian domestic issue — a question of religion and party politics — to a religious-freedom and civil-society issue inside the U.S.–India relationship.

India's Rebuttal, and the Gap It Leaves

India's ambassador to the United States, Vinay Mohan Kwatra, pushed back on social media: the amendment does not give the government the power to seize all of an NGO's property; what may come under management is only the foreign contributions and the assets built from those contributions, and the takeover is "provisional" in the first instance — once the organization restores its registration, the unused funds and the related assets are returned in full; for places of worship, the new law also requires that their religious character be preserved, and the premises may be handed over to another FCRA-eligible organization of the same religion for continued management. India's Ministry of External Affairs likewise responded that the FCRA amendment is a matter of internal Indian legislation and is not aimed at any particular religion.

But the rebuttal only addresses half the dispute. The new law does materially expand the government's control over the assets of foreign-funded institutions: the new trigger of "failure to renew" brings asset takeover into play, and for the first time it explicitly provides that, where an organization fails to restore its registration, the assets can be placed under permanent management by the designated authority or even sold. That means a hospital built in earlier years with foreign contributions and now running entirely on domestic funds could still be taken over by the government — solely on the ground that it was "originally built with foreign money" — simply because it failed to renew its FCRA registration. The promise of "no confiscation" does not constrain the new clause that "takeover is permitted."