Foreign Funding: Is India Judged by Different Lens ?

The new amendments by the Government of India to the Foreign Contribution (Regulation) Act have once again created a stir regarding NGOs, foreign funding and democratic sovereignty. Critics allege that the government seeks to limit the freedom of civil society, while the government says that these amendments are aimed at ensuring transparency, accountability and national security in the use of foreign funds.

In 2025, US President Donald Trump claimed that US $21 million had been approved to increase voter participation in India. And the Trump administration later froze its stake in US foreign aid programs, including the United States Agency for International Development, cut some projects, and began reorganizing US foreign aid. After these incidents, new concerns started emerging in the minds of the common people regarding foreign influence and foreign financing. Election interference, digital disinformation, foreign lobbying, and attempts to exert policy influence through non-state organizations have prompted many democracies around the world to make their laws more stringent.

But amidst this entire controversy, a fundamental question is, are the same expectations being made from India, which Western democracies do not implement in their own countries? The United States has had the Foreign Agents Registration Act in place since 1938. Under this law, any person or organization working in the interest of a foreign government, political party or foreign institution has to compulsorily register itself and make public disclosure of its activities. Britain has implemented the Foreign Influence Registration Scheme under the National Security Act 2023. Australia enacted the Foreign Influence Transparency Scheme Act in 2018, while several countries in Europe have increased oversight of foreign lobbying and foreign political influence. It is clear that today almost all the major democracies of the world have accepted that democracy does not only run on free elections, but it is also necessary to protect it from external influences.

India’s regulatory framework is different from Western countries. While the US and UK insist on registration and disclosure of organizations representing foreign interests, India directly regulates the receipt, use and purpose of foreign funds. India argues that strict monitoring of foreign funding is necessary given its population of over 140 crore, diverse social structure and challenges such as terrorism, separatism and foreign influence campaigns. For this purpose, the Foreign Contribution (Regulation) Act was implemented, which was enacted in 1976 and implemented in a new form in 2010. Currently around 16,000 organizations are registered under FCRA. It is mandatory for them to submit receipt, utilization and annual accounts of foreign contribution to the Ministry of Home Affairs. Over the past decade, licenses of thousands of institutions have been canceled or not renewed due to lack of compliance. The 2020 amendments reduced the limit on administrative expenses from 50 per cent to 20 per cent, mandated a single FCRA account in SBI, New Delhi for all foreign contributions and banned transfer of foreign funds from one NGO to another. Aadhaar-based identification was also made mandatory for key officials. The new amendments further strengthen monitoring. If the FCRA registration of an institution is cancelled, terminated or not renewed, the management of the assets created with foreign contribution may be handed over to an authority designated by the Government. Some lawmakers in the US, notably Republican MP Chris Smith, have alleged that this would have an adverse impact on Christian churches and charitable institutions in particular and undermine religious freedom and civil society. They argue that stricter compliance rules and increased surveillance on conversions will make it harder for church-based institutions to receive foreign aid and operate social services. On the other hand, the Government of India is of the clear view that the purpose of these amendments is not to target any community or religion, but to ensure transparency, accountability and national security in the use of foreign funds.

The ongoing debate on FCRA has also brought into focus the fine line between humanitarian aid and religious conversion. The question is not whether humanitarian work like education, health, disaster relief or welfare of the poor should be done or not, undoubtedly it should be done. The real question is whether such humanitarian actions can become a medium for propagating or converting any particular religion? If the purpose of foreign aid is only human service, then why is the question of religious conversion or faith change associated with it? It is this concern that has prompted the government to take steps to establish a clear separation between humanitarian aid and religious propaganda. This is why the proposed amendments have attempted to provide greater clarity and monitoring on the provisions related to conversion and foreign funding. Similarly, can foreign funding affect democracy? This question is not limited to India. Accusations of Russia interfering in US elections, investigations into foreign disinformation campaigns in Europe, and influence campaigns involving China have made democratic institutions around the world more cautious.

The real question is not whether India should monitor foreign funding, but whether it has the same regulatory powers that the US, UK, Australia and Europe reserve for themselves. If Western democracies can control foreign influence in the name of national security and democratic sovereignty, India’s efforts should also be viewed in the same light. India is the world’s largest democracy, where about 64 crore voters voted in the 2024 Lok Sabha elections. In such a situation, protecting the credibility and sovereignty of democratic institutions is of paramount importance. In this context, this question is also important that if the purpose of foreign aid is human service, then is religious conversion justified under its guise? The purpose of humanitarian aid should be service, not religious or ideological influence. Foreign cooperation is welcome, but it cannot be at the cost of India’s sovereignty, constitutional order and democratic autonomy.