Link to Introduction Introduction
The Foreign Contribution (Regulation) Act, 2010 (“FCRA”)[i], regulates the flow and use of foreign funds by individuals, associations, and organisations in India. Over time, the regulatory framework under FCRA has evolved, introducing several compliance obligations for entities receiving foreign contributions. In April 2025[ii], a key amendment was introduced concerning the validity of prior permissions. To strengthen the FCRA regime further, the Ministry of Home Affairs (“MHA”) notified amendments to the Foreign Contribution (Regulation) Rules, 2011 (“FCR Rules”)[iii], on May 26, 2025 (“May 2025 Amendments”)[iv]. These amendments bring important changes to the registration, prior permission, renewal processes, and other post-registration compliances.
This blog provides an overview of the key changes introduced by the May 2025 Amendments, examines their broader implications for stakeholders, and highlights enhanced procedural and disclosure requirements under the FCRA regime.
Link to Key amendments and their implications: Key amendments and their implications:
Link to Stricter Conditions for Seeking Prior Permission Stricter Conditions for Seeking Prior Permission
As per the FCRA, any person not registered under it, but seeking to receive foreign contributions must obtain prior permission to receive such funds for a specific project or activity. Applicants seeking prior permission must now submit a declaration that administrative expenses will not exceed 20 per cent of the proposed foreign contribution, in line with Section 8[v] of the FCRA. They must also submit an undertaking[vi] confirming adherence to the Good Practice Guidelines of the Financial Action Task Force which, among other things, require that the foreign contribution is utilised strictly, in accordance with the MHA approved objectives and that the organisation discloses its goals, objectives, and activities on its website.
While these disclosures formed an inherent part of how foreign contributions into India were meant to be used under the FCRA, these additional undertakings are intended to increase accountability and transparency in the use of such funds for approved purposes only.
Link to Increased Documentation for Registration and Renewal Applications Increased Documentation for Registration and Renewal Applications
Previously, applicants had to submit audited statements and an activity report for the last three years at the time of registration. Now, they must submit such financial statements and audit reports, alongwith the statement of assets and liabilities, receipts and payments account, and income and expenditure account. If these do not reflect activity-wise expenditure, a chartered accountant’s certificate[vii] is required to that effect, duly reconciled with the income and expenditure account and the receipt and payment account. While these disclosures may filter out dormant or non-compliant entities and ensure that only organisations with a compliant record receive and utilise foreign contributions, it may be difficult for smaller or new organisations to comply with, despite being legitimate and purpose-driven.
Additionally, year-wise activity reports of the last three years and an affidavit in Proforma “AA” from each key functionary, such as the chairperson, secretary, CEO, or MD (“Key Person/s”), must be submitted. The requirement to submit Proforma “AA” has also been extended to renew applications under the FCRA. Proforma “AA” is a standard affidavit format under the FCR Rules confirming personal and legal background of a Key Person. After the May 2025 Amendments, Key Persons must now also affirm their citizenship status, including overseas citizen of India details, if applicable, declare any past convictions, and disclose any pending prosecutions. These changes aim to maintain verifiable data regarding individuals handling foreign contributions and align FCRA compliance with national security norms.
If the FCRA registration has expired or been cancelled, and if foreign contribution was received prior to such expiry or cancellation, but remains unutilised thereafter, the applicant must submit an affidavit detailing such receipt and utilisation since expiry, along with certified statements of the FCRA designated and utilisation bank accounts. This requirement now applies to renewal applications as well. Also, if an applicant’s expenditure on its aims and objectives is below INR 15 lakh in the past three years, an affidavit must be filed to account for capital investments in assets such as land, buildings, or vehicles. These rules aim to ensure that even expired or inactive registrations or such entities are accounted for, thereby reducing the possibility of misuse or non-reporting of foreign contributions received in the past.
Link to Other Compliances Other Compliances
Section 3(1)(g)[viii] of the FCRA already prohibits any entity involved in producing or broadcasting audio, audio-visual news or current affairs from accepting foreign contributions. In line with this prohibition, the May 2025 Amendments now require that if an association is engaged in such activities or if such activities are part of its objectives, it must submit an undertaking by the Key Person of the concerned association confirming its compliance with section 3(1)(g). If the publication is registered with the Registrar of Newspapers for India (now Press Registrar General of India) (“Registrar”), a “Not a Newspaper” certificate must also be obtained from the Registrar by giving an affidavit confirming that its publication does not contain news related content[ix].
However, the term “publication-related activities” remains undefined under the current FCRA regime, leading to ambiguity in interpreting its scope. This may have an unintended effect on legitimate educational or policy-oriented dissemination, unless further guidance is issued by the authorities. Going forward, such entities may need to reassess their stated objectives and ongoing activities to ensure that they do not unintentionally fall under the ambit of such activities.
Pursuant to the May 2025 Amendments, as part of the annual returns filing[x] with the MHA, the address or location of each fresh asset and movable asset created out of foreign contribution must also be disclosed. In case of immovable properties, along with details such as size, address, location, and value as per balance sheet, the value at the beginning of the year, value of acquisitions during the year, and value of disposals must also be disclosed.
Earlier, a chartered accountant’s certificate covered overall receipts and utilisation of foreign contributions[xi]. Now, the certification must include project-wise and location-wise receipts and utilisation in both cash and kind, detailing opening balance, receipts, utilisation, and closing balance for each activity. This reflects a shift towards outcome-based reporting, with a focus on the actual impact of foreign contributions.
Further, compliance for notifying changes in name, address, objectives, FCRA account, additional accounts, or Key Person has been strengthened. Previously, an undertaking was sufficient. Now, both an undertaking and supporting documents are required to be submitted. These include internal resolutions, authority approvals, bank letters, or affidavits in Proforma “AA”, depending on the nature of the change.
Link to In summary In summary
The theme for the May 2025 Amendments appears to revolve around submission of additional documents by entities receiving and utilising foreign contribution, including new or updated undertakings, affidavits and several supporting documents. The MHA has attempted to further tighten oversight on such entities, while emphasising traceability, project-level transparency, and greater scrutiny of those involved in publication-related activities. However, as “publication-related activities” remain undefined, organisations involved in education or policy dissemination may face uncertainty. Hence, clarification from authorities in this regard is crucial for consistent interpretation.
Moreover, while these changes strengthen compliance, smaller entities with limited administrative support may face the brunt of the increased compliance burden more. Therefore, entities must carefully review internal records, streamline documentation and adopt a proactive approach to avoid disruptions in receiving foreign funding and ensure continued compliance in an increasingly rigorous regulatory environment.
[i] Foreign Contribution (Regulation) Act, 2010 (“FCRA”).
[ii] Public Notice dated April 07, 2025 regarding processing of prior permission application under FCRA (Available at Notice dated April 07, 2025).
[iii] Foreign Contribution (Regulation) Rules, 2011 (“FCR Rules”).
[iv] Foreign Contribution (Regulation) Amendment Rules, 2025.
[v] FCRA, section 8.
[vi] Good practice Guidelines to the NPOs to ensure compliance with FATF requirements (Available at FATF requirements).
[vii] Chartered accountant’s certificate specifying the activity-wise amount (Available at chartered accountant’s certificate).
[viii] FCRA, section 3(1)(g).
[ix] Obtaining “Not a Newspaper” certificate (Available at Press Sewa Portal).
[x] FCR Rules, rule 17.
[xi] FCR Rules, rule 17(5).