I have sat with enough small trusts and societies to know the file before I know the people. A thick folder of bank letters, audit reports, board resolutions, and returns filed year after year, and under it a quiet worry each time a renewal comes due. The Foreign Contribution (Regulation) Amendment Rules, 2026, notified by the Ministry of Home Affairs on 22 June 2026, add several pages to that folder. At first sight this is one more round of compliance. Read with some care, it is a larger shift.

For most of the last decade the law asked one plain question. Where is the money coming from, and can it be traced? The 2026 Rules ask more. What does the organisation do, where does it do it, and who runs it? The focus moves from the source of the money to the work it pays for, and from the body that receives it to the people behind it. I will take the main changes one at a time. For each, I will set out the earlier law, then the amendment, and then what I think it means for the bodies that must live with it.

Registration by purpose and place

The earlier position was open. A body registered under one of five broad heads, religious, social, economic, cultural, or educational, and chose its own activities as its work grew. The registration certificate did not fix a list of activities or name the States where it worked.

The 2026 Rules close that space. The government has prepared a Schedule of activities under each head, and an application must now choose from that list and name the States or Union Territories where it will work. Both the purpose and the place are entered on the certificate. A body registered before the amendment has one year to file Form FC-6F and confirm what it wishes to keep, and any later change of purpose or place needs a fresh application supported by a resolution of the governing body.

For a settled body this is manageable. For one that is still finding its work, it is not. A trust that starts with a village school often adds a clinic, then a skills class, then a support group for women, one need leading to the next. Under the earlier law that was its own choice. Under the new one, each step can be measured against the purpose and the area it declared at the start, and a body that has grown in good faith may be asked to explain why it strayed. The regulator now looks at the work, and not only at the account.

Who counts as the organisation

Earlier, the duty to comply sat with the directors and office bearers. The law reached the people who signed the papers, and not much beyond them.

The 2026 Rules give the term key functionary a much wider meaning. It now covers the director of a company, a partner in a firm, a trustee, the Karta of a Hindu Undivided Family, members of a governing body, managing committee or other controlling authority, and any person who controls the management or affairs of the body. A separate bar sits beside it. A body that has foreign nationals as key functionaries, other than persons of Indian origin holding OCI or PIO status, will not, as a rule, be eligible for registration or prior permission, unless the Central Government allows it by order.

The wider meaning has some sense to it. Real influence in a body often lies with people who hold no formal post, and the law is right to look past the letterhead. The difficulty is reach. More people now fall within scrutiny, and the phrase other controlling authority could, in a society, take in every voting member of the general body. The bar on foreign nationals is harder to defend. Many honest bodies have a foreign trustee or adviser who has served them well for years. To treat that presence, on its own, as a reason to refuse registration reads as a distrust of any outside hand in local work. The concern for sovereignty is real. So is the cost to small bodies that were never a risk.

Spend the money, and show it

Earlier, a body accounted for its use of foreign funds through its annual returns. There was no rule that a fixed share of one instalment had to be used before the next, no floor on how much a body had to spend, and no duty to disclose its website, its social media, or its writing.

The 2026 Rules add all three. A body with prior permission must apply in Form FC-3BB, and its next instalment is released only after it has used seventy five per cent of the last one and passed a field inquiry. A body is treated as having carried out reasonable activity only if it has spent at least ten lakh rupees of foreign contribution in the previous two financial years, a test that applies at renewal and at cancellation. And a body must now disclose its websites, its social media accounts, and the books and articles brought out by it or its functionaries.

The spending tests are aimed at bodies that hold a registration but do little with it, which is a fair thing to check. The weight of them, though, falls on the smallest bodies. A two-person office does not have a compliance department, and it is these bodies that have the fewest hands to meet a field inquiry or track a spending threshold. The disclosure duty raises a different point. It brings into the record not only what a body spends, but what it says. For groups whose work is research, policy, or advocacy, their public voice now sits before the regulator in a way it did not before, and that is worth naming.

The religious schedule and the undefined line

A body could register under the broad religious head without setting out the exact nature of its work, and the earlier Rules did not single out proselytisation. The constitutional line, though, was already drawn. In Rev. Stainislaus v. State of Madhya Pradesh, 1977 INSC 13, the Supreme Court held that the right to propagate one's religion under Article 25 does not include a right to convert another person.

The 2026 Schedule now sets out what foreign funds may support under the religious head: the upkeep of places of worship, the translation and digitisation of scripture, religious education, discourses and retreats, devotional music and the arts, and the documentation of tribal and indigenous faith practices. Each entry carries the same words, excluding proselytisation. The fees also rise, with an added three hundred rupees for every extra State and every extra purpose.

I write from Kerala, where faith based bodies run schools, hospitals, hostels, and relief work, much of it long supported by funds from abroad. The government's worry is that welfare is at times used as a cover for conversion, and it is within its right to guard against that. The trouble is that the Rules never say where ordinary religious life ends and proselytisation begins. A scripture class, a free meal, a hostel for poor students, each can be read in good faith or with suspicion. When the key word is left undefined, the judgment passes to the officer at the counter, and a judgment without a standard is where unfairness enters. That, and not the Schedule, is what a careful reader should watch.

The constitutional backdrop

None of this is new ground. In Noel Harper v. Union of India, 2022 LiveLaw (SC) 355, the Supreme Court upheld the 2020 amendments to the FCRA and held that no one has a fundamental right to receive foreign contribution. The Court accepted that foreign money can affect the social, economic, and political life of a country, and that a strict regime was a fair answer. The power to regulate, then, is settled.

These Rules are one more step in that direction. The 2020 amendments tightened how foreign money could be received and moved. Later rule changes added financial disclosures and auditor certification. A separate Amendment Bill before Parliament this year would go further, allowing the assets of a body whose registration is cancelled or lapses to pass to a government appointed authority. Each measure can be defended on its own. It is their combined weight that civil society feels.

What remains open is the question of proportion. The freedom to form associations under Article 19(1)(c) means little if those associations cannot raise the funds to act. In Noel Harper the issue was framed as a right to receive foreign money, which no one asserts. The real interest is the freedom to associate, and a body cannot pursue a purpose it has no means to fund. A restriction may carry a sound aim and still be unreasonable in design, if it places on honest bodies a burden with no real link to the harm the State is chasing. That is the ground on which these Rules can be tested, and in time may be.

Where I stand

I do not read these Rules as an attack on civil society, and the louder claims to that effect do the discussion no good. The State has a real interest in knowing how foreign money becomes work on Indian soil, and the misuse it points to is not invented. My concern lies elsewhere.

It lies in vague terms, in added cost, and in the want of a quick appeal. Proselytisation and reasonable activity need settled meanings, or they will be read one way in one office and another in the next. The compliance load, the higher fees, the seventy five per cent rule, and the task of mapping every activity to a fixed Schedule will press hardest on the smallest bodies. A regime this strict needs a fast and independent way to contest a refusal or a cancellation, so that a body is not left with only the slow road of a writ petition for what may be a small error.

The words of the 2026 Rules will not settle whether this is regulation or restriction. The way officials use them will. Used with openness and a sense of proportion, they can build trust in how foreign funds are handled. Used to question and delay, they will narrow the space in which independent bodies do work the State cannot reach on its own. For the small bodies I have sat with, that is not an abstract worry. It will decide whether they can carry on.

Author is an Advocate & an MCPC and Supreme Court Empanelled Accredited Arbitrator and Mediator. Views are personal.