India plans state takeover of NGOs’ assets built with foreign funds
New FCRA amendment could allow government to assume ownership of schools, hospitals, and community centers if NGOs licenses are cancelled or expire
NEW DELHI, India (MNTV) — The Government of India has introduced the Foreign Contribution (Regulation) Amendment Bill, 2026, in the Lok Sabha, proposing sweeping new powers that would allow the state to take ownership of physical assets built with foreign funding if a non-governmental organization’s license is cancelled, surrendered, or expires without renewal.
The proposed amendment marks a significant shift in the regulation of foreign-funded organizations. Previous provisions under the Foreign Contribution Regulation Act (FCRA) focused mainly on monitoring and restricting the flow of foreign funds, including freezing bank accounts and cancelling licenses.
The new bill, however, introduces provisions for the “vesting” of assets, meaning ownership of properties such as schools, hospitals, hostels, and community centers could be transferred to the government under certain circumstances.
According to the proposed mechanism, a designated government authority would be empowered to take control of assets created wholly or partially through foreign contributions once an organization loses its FCRA registration.
The bill does not clearly outline a mechanism to separate domestic funding from foreign funding in such assets, raising concerns among legal experts and civil society groups.
Critics say the amendment could have a significant impact on the nonprofit sector, particularly organizations working in education, healthcare, and community development, many of which rely partially on foreign funding.
They argue that the risk of losing physical assets could discourage long-term investments in social welfare projects and create uncertainty for organizations working with marginalized communities.
The government, however, has defended FCRA regulations in the past as necessary to ensure transparency, accountability, and protection of national interests, maintaining that foreign funding must not be used for activities deemed detrimental to the country.
The bill is currently under consideration in Parliament and is expected to be debated in the coming weeks.
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