FCRA: Prior Permission Now Time-Capped

On April 7, 2025, the Ministry of Home Affairs issued a public notice outlining the time limits for the validity of prior permission granted under the Foreign Contribution (Regulation) Act, 2010 (FCRA). Consequently, Non-Governmental Organisations (NGOs) will have three years to receive foreign contributions and four years to utilise them under the prior permission route.

Background

The 2010 Act regulates the receipt and utilisation of foreign contributions by persons or associations in India to ensure these funds are not diverted to activities detrimental to the national interest. Under the Act, persons having a definite cultural, economic, educational, religious, or social programme can only accept foreign contributions if they have either a certificate of registration or prior permission from the Central Government.[1]

To be eligible for registration under the Act, an association must meet specific criteria, such as being in existence for at least three years and having spent a minimum of Rs. 15 lakh on its core activities for the benefit of society over the past three financial years.[2] However, organisations in their formative stages are not eligible for registration. In such cases, they may apply for prior permission to receive foreign contributions for projects benefiting society.

Ministry of Home Affairs’ Public Notice

Here are the key aspects of the public notice:

• Validity period of prior permission:

While the Act specifies a five-year validity for the certificate of registration, there were no explicit time limits for receiving or utilising foreign contributions under the prior permission route. Prior permission was valid for the specific purpose for which it was obtained and from the specific source.

The public notice now sets a clear timeline: foreign contributions must be received within three years and utilised within four years from the date of approval of the prior permission application. Any receipt or utilisation of foreign contributions beyond these limits will constitute a violation of the Act.

• Implications for projects with existing prior permission:

If prior permission has already been granted by the Government and the remaining period of the approved project exceeds three years, the time limits for receiving or utilising foreign contributions will be computed from the date of the public notice i.e., April 7, 2025 (and not the date of approval of prior permission application).

• Extension in exceptional cases:

The Ministry has also noted that in exceptional cases, it may grant extensions in the validity period to organisations based on the merits of each case.

[1] Sub-sections (1) and (2) of Section 11 of the FCRA.

[2] Section 12(4)(b) of the FCRA read with Rule 9(1)(f)(i) of the Foreign Contribution (Regulation) Rules, 2011.