Activists on Sept. 21, 2024, attend a conference in Chennai, India, that focused on climate change and how it impacts transgender women. A proposed overhaul to India’s foreign funding law could further pressure advocacy groups that are already struggling to secure funding. (Courtesy photo)
India’s proposed overhaul of its foreign funding law could put LGBTQ organizations that depend on overseas donations under new pressure.
Introduced in the Lok Sabha, the lower house of Parliament, on March 25, the Foreign Contribution (Regulation) Amendment Bill, 2026, or FCRA, would give a government-designated authority control over foreign funds, and assets when an organization loses or surrenders its registration.
The Foreign Contribution (Regulation) Amendment Bill returned to the spotlight this month as the Indian government prepared to seek its passage during Parliament’s Monsoon Session; drawing fierce opposition from political parties, civil society groups and religious organizations.
The government says the bill is intended to address gaps in the management of foreign funds and assets when an organization’s FCRA registration is cancelled, surrendered, or expires. The Foreign Contribution (Regulation) Amendment Bill, 2026, would create a Designated Authority to oversee the vesting, supervision, management, and disposal of foreign contributions and assets when an organization’s FCRA registration is cancelled, surrendered, or ceases. If a vested asset is a place of worship, the authority would be required to preserve its religious character. The FCRA would also reduce the maximum prison term for violating the law from five years to one year.
The changes could also make it difficult for organizations to leave the FCRA regime without surrendering assets created with foreign funds. Under the bill, an organization would have to keep renewing its FCRA certificate to retain those assets. FCRA rules also impose spending requirements on organizations seeking to maintain their certificates.
The bill may also create a distinction between assets created by organizations with FCRA registration and those created through the separate prior-permission route.
More significantly, neither the existing law nor the bill provides an appeal mechanism when the central government refuses to renew an FCRA certificate. They also do not expressly require the organization to be given an opportunity to be heard before renewal is denied. Under the proposed framework, such a denial could trigger the vesting of the organization’s foreign-funded assets in the Designated Authority.
The bill would also widen the circle of people who could face consequences for an organization’s FCRA violations.
Its definition of “key functionary” extends beyond directors and office bearers to trustees, governing-body members, managing-committee members and others responsible for an organization’s affairs. Those functionaries could be held liable for offenses committed by the organization, unless they can show that they were unaware of the violation or had exercised due diligence to prevent it. The FCRA bill would also impose restrictions on dealing with foreign-funded assets during a suspension and leave several important operational details — including timelines and procedures for managing and returning assets — to rules that have yet to be prescribed.
Parliament on Aug 12 moved to refer the FCRA bill to a parliamentary committee for further scrutiny and wider consultations.
Minister of State for Home Nityanand Rai moved the motion in the Lok Sabha, to refer the bill to a committee comprising 21 members of the lower house and 10 members of the Rajya Sabha, Parliament’s upper house.
The Rajya Sabha subsequently approved the nomination of its 10 members to the committee. The panel is expected to submit its report by the last day of the first week of Parliament’s Winter Session.
The proposed changes could have significant implications for LGBTQ organizations that rely on the FCRA framework to receive foreign contributions. (The global LGBTQ and intersex rights movement since the Trump-Vance administration took office in 2025 has lost nearly $50 million in U.S. funding because of foreign aid cuts. One source with whom the Washington Blade spoke described the funding loss as a “catastrophe” for the global movement.)
While the government does not appear to have published an easily accessible, consolidated list of LGBTQ organizations receiving such funding, FCRA registration records and organizations’ financial disclosures indicate that foreign contributions have supported LGBTQ rights, healthcare, and community services in India.
K.C. Venugopal, general secretary of the opposition Indian National Congress, told reporters his party and other opposition parties would strongly protest the legislation if it were introduced in Parliament. He said the bill was aimed at targeting minorities and NGOs and vowed that the opposition would oppose its passage.
Venugopal called the proposed legislation “unconstitutional and anti-people.”
“If the Central Government thinks they can cook up and introduce the Foreign Contribution (Regulation) Amendment Bill within these two or three days, they should keep that wish to themselves,” he told reporters in Alappuzha, Kerala, on Aug. 9.
“Three provisions worry LGBTQ+ organizations like ours most directly,” said Souvik Saha, founder of People for Change and Jamshedpur Queer Circle. “First, the 2026 bill would let a government-appointed ‘Designated Authority’ take control of an organization’s foreign-funded assets— bank balances, equipments, sometimes even property— the moment its FCRA registration is cancelled, surrendered, or simply not renewed, and this happens through an administrative process, without prior judicial adjudication. For a small community organization, that means losing everything we have built — case files, shelter infrastructure, helpline equipment — almost overnight, with no court hearing first.”
Saha told the Blade the revised FCRA Rules announced in June introduced a minimum spending threshold: organizations must spend at least $10,449 in foreign contributions over two financial years or risk cancellation and non-renewal of their registration.
“This specifically penalizes small and grassroots groups that deliberately keep their foreign funding modest — which describes most LGBTQ organizations in India, including ours,” said Saha. “We are not running core-scale budgets; we are running helplines, safe spaces, and district-level outreach on modest grants.”
Saha told the Blade that the ban on sub-granting, carried over from the 2020 amendment, means larger, well-established rights organizations cannot pass foreign funds to smaller, unregistered LGBTQ collectives that could not obtain FCRA registration themselves. He said rights groups have long described the restriction as a near “death knell” for hundreds of small nongovernmental organizations that work collaboratively with larger organizations, adding that LGBTQ groups outside major metropolitan areas depend heavily on such funding arrangements.
“Domestic funding for LGBTQ work in India is still thin, CSR (Corporate Social Responsibility) money avoids us because we are seen as ‘controversial,’ and most Indian foundations would not touch gender-identity programming,” Saha said. “So foreign funding is not a convenience for organizations working with the transgender and LGBTQ community, it is often always funding.”
The National LGBT Media Association represents 13 legacy publications in major markets across the country with a collective readership of more than 400K in print and more than 1 million + online. Learn more here: NationalLGBTMediaAssociation.com.
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