The Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) is an Act of the Parliament of India that consolidates the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by individuals, associations, or companies. Its primary purpose is to prohibit the use of foreign funds for any activities detrimental to the national interest.
The FCRA, 2010 replaced the earlier Foreign Contribution (Regulation) Act, 1976, which was first enacted on March 31, 1976, during the Emergency period. The original Act was created out of apprehension that foreign powers were interfering in India's affairs by channeling funds through independent organisations, aiming to regulate foreign funding to maintain the values of a sovereign, democratic republic. The 2010 Act, which received Presidential assent on September 26, 2010, and came into force on May 1, 2011, was designed to address the shortcomings of its predecessor and impose stricter controls.
The Act's mechanism centers on two gateways for receiving foreign funds: registration under Section 11 or prior permission from the Central Government, which is the Ministry of Home Affairs (MHA). Registration is granted for five years and is renewable, while prior permission is for a specific amount from a named donor for a specific project. Key provisions mandate that foreign contribution must be received in a single designated FCRA bank account in a branch of the State Bank of India, New Delhi, and cannot be mingled with domestic funds. Furthermore, certain persons, including election candidates, political parties, judges, legislators, and news publishers, are prohibited from accepting foreign contribution.
The FCRA, 2010 is closely connected to the Foreign Exchange Management Act (FEMA), but while FEMA governs commercial foreign exchange transactions, FCRA governs gratuitous contributions on a security and sovereignty logic. The Act has been significantly amended, most notably by the Foreign Contribution (Regulation) Amendment Act, 2020. This amendment lowered the limit on using foreign funds for administrative expenses from 50% to 20%, and prohibited the transfer of foreign contribution from one registered recipient to any other person, a practice known as sub-granting. The 2020 amendment also made the Aadhaar number mandatory for all office bearers of the recipient organisation.