Indian nonprofits have had their work obstructed thanks to restrictions on foreign donations. Could the US follow suit?
By Ankita Dhar Karmakar ,
March 29, 2025
Members of the right-wing Hindu nationalist group ABVP shout slogans against human rights group Amnesty International India, in New Delhi, India
.K Asif / The India Today Group via Getty Images
In March 2023, Meeta, who worked as a community mobilizer and network coordinator with a prominent Delhi-based Indian NGO, lost her job of 15 years. Meeta was fired less than a month after her organization lost its status under the Foreign Contribution (Regulation) Act (FCRA), which governs the receipt and use of foreign funds by nonprofits in India. Organizations without a valid FCRA certification are barred from accessing international donations.
Meeta’s employer is just one of several nonprofit organizations and human rights leaders who have been dismantled or had their work obstructed by the Indian government’s free reign to revoke their FCRA status.
In the U.S., a recent legislative proposal, HR 9495, threatens to impose a familiar type of restriction on nonprofits. Much like the FCRA allows India’s Ministry of Home Affairs to strip nonprofits of certain fundraising status, the proposed bill in the United States would allow the treasury secretary to remove the tax-exempt status of any nonprofit that they unilaterally deem to be a “terrorist supporting organization” without due process or evidence requirements. While the bill was passed in the U.S. House of Representatives in the last legislative session, it never made it through the Senate; now, with a Republican Senate, there are concerns the bill could be reintroduced and more easily become law.
The bill’s critics say this could have far-reaching consequences for organizations engaged in politically sensitive advocacy, and have nicknamed it the “nonprofit killer” bill.
As U.S.-based groups brace for a potential shift in nonprofit funding, India’s experience serves as both a cautionary tale and a stark example of what the U.S. nonprofit sector may endure if HR 9495 is implemented.
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In March 2023, Meeta, who worked as a community mobilizer and network coordinator with a prominent Delhi-based Indian NGO, lost her job of 15 years. Meeta was fired less than a month after her organization lost its status under the Foreign Contribution (Regulation) Act (FCRA), which governs the receipt and use of foreign funds by nonprofits in India. Organizations without a valid FCRA certification are barred from accessing international donations.
Meeta’s employer is just one of several nonprofit organizations and human rights leaders who have been dismantled or had their work obstructed by the Indian government’s free reign to revoke their FCRA status.
In the U.S., a recent legislative proposal, HR 9495, threatens to impose a familiar type of restriction on nonprofits. Much like the FCRA allows India’s Ministry of Home Affairs to strip nonprofits of certain fundraising status, the proposed bill in the United States would allow the treasury secretary to remove the tax-exempt status of any nonprofit that they unilaterally deem to be a “terrorist supporting organization” without due process or evidence requirements. While the bill was passed in the U.S. House of Representatives in the last legislative session, it never made it through the Senate; now, with a Republican Senate, there are concerns the bill could be reintroduced and more easily become law.
The bill’s critics say this could have far-reaching consequences for organizations engaged in politically sensitive advocacy, and have nicknamed it the “nonprofit killer” bill.
As U.S.-based groups brace for a potential shift in nonprofit funding, India’s experience serves as both a cautionary tale and a stark example of what the U.S. nonprofit sector may endure if HR 9495 is implemented.
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Human Rights Work Affected
After losing her job, Meeta, who requested to use a pseudonym in order to speak candidly about her former employer, remained unemployed for nine months. A single mother of two, after years of renting she had just bought a house on a personal loan a month before being let go. But without a job, repaying the loan became a struggle.
Meanwhile, her former employer, which works on sustainable livelihoods, climate resilience and urban homelessness, among other issues, is one of thousands of nonprofits in India that have lost their ability to receive foreign funds under the FCRA over the last several decades, either due to cancellations or nonrenewals of their certification. Without that funding, sources say the organization has had to dramatically downsize.
Some of the most high-profile organizations affected by FCRA restrictions include the Centre for Policy Research (CPR), Save The Children and World Vision, whose licenses have been canceled. Several rights organizations, like Amnesty International India, Environics Trust and Oxfam India, as well as individual activists, like environmental lawyer Ritwick Dutta and human rights advocate Harsh Mander, are also facing criminal charges under fraud and financial irregularities allegations. This has also impacted employment in India’s vast social sector, which consists of 3.3 million nonprofits that employ over 18 million people. For example, Amnesty International has ceased all of its operations within India.
The Citizen for Justice and Peace, led by Teesta Setalvad, has been a longtime critic of Prime Minister Narendra Modi and his alleged role in the 2002 Gujarat riots, in which more than 1,000 people, mostly Muslim, were killed. That organization also lost its FCRA license in 2016. Setalvad said the revocation of the license is part of the “witch hunt” that the Modi government is conducting to target her for speaking against the perpetrators of the riots.
Civil society groups see this as part of a broader crackdown on dissent in India, especially after a 2020 amendment to the FCRA imposed even further restrictions on organizations. According to the CIVICUS Monitor, a global research platform that tracks and assesses the state of civic freedoms, India’s civic space is classified as “repressed.”
In recent years, the Unlawful Activities (Prevention) Act (UAPA) has been increasingly used in addition to the FCRA to target human rights activists and journalists. The UAPA, India’s primary “anti-terror” law, grants sweeping powers to the state, allowing authorities to designate individuals and organizations as terrorists, detain them without charge for up to 180 days, and impose strict bail conditions. Critics argue that its vague definitions and low conviction rates make it a tool for suppressing dissent, with journalists, activists, poets, Kashmiri civilians, and students frequently targeted under its provisions.
Earlier, the law was primarily used to ban organizations deemed a threat to national security. However, a 2019 amendment to the UAPA made it even more powerful by allowing the government to designate individuals as terrorists. Its application surged in the wake of protests around some of the Modi government’s more controversial policies, with several student activists, journalists and lawyers jailed under its provisions.
Now, the tightening of FCRA limitations has further contributed to shrinking this already restricted space.
Several NGOs told Truthout that losing access to foreign funds has drastically affected their ability to sustain human rights work at scale.
Speaking on the condition of anonymity, a spokesperson for another prominent NGO that has been operating in India since independence — working on sustainable livelihoods, education, health and gender issues among marginalized communities — revealed that it has been forced to shut down operations across all states. Similarly, the NGO that Meeta used to work for notes that 95 percent of its operations have had to be scaled down, impacting a majority of its beneficiaries including the urban poor and the homeless, especially from Dalit, Adivasi and religious minority communities.
While the reason for the FCRA nonrenewal of Meeta’s employer was not specified, the other NGO’s reject notice mentioned involvement in activities deemed prejudicial to the public interest ongoing legal cases involving figures in the organization. This falls under Section 12(4) of the FCRA, which states that if any office bearer has a pending prosecution, it can impact the organization’s eligibility, and Section 14(c), which grants the government the authority to cancel an FCRA certificate if it deems it necessary in the public interest. However, the law does not define what constitutes public interest. In attempt to gain renewal, the second NGO said it promptly replaced the board members and submitted an updated list, but this did not change the outcome.
Anisha*, a Supreme Court lawyer who has handled cases involving NGOs and their FCRA licenses and also spoke with Truthout under condition of anonymity, notes that because Section 14(c) is so broadly worded, it makes it easy for authorities to issue vague orders alleging that an organization is acting against public interest and cancel its registration.
Curiously, Section 14(2) of the law says that no order of cancellation shall be made unless the person concerned has been given a reasonable opportunity to be heard. The organizations Truthout spoke to said this has not been the case for their groups when their FCRA registration was canceled or not renewed.
After multiple organizations appealed to the Ministry of Home Affairs for clarification on their FCRA denials, the government, on November 8, 2024, released a notice that cited the reasons for rejection. These included involvement in “anti-development activities,” “inciting malicious protests” and participation in “induced/forceful religious conversions.” Yet again, none of these terms were specifically defined. “This denial has restricted development efforts in reaching the most marginalized communities, and hinders progress on persistent issues such as malnutrition, education, livelihoods, gender, and caste-based discrimination,” said Annie Namala, executive director of the Centre for Social Equity and Inclusion (CSEI). While CSEI is among the NGOs whose FCRA has been renewed, there continues to be uncertainty about making long-term plans for the organization’s work.
“It has also curtailed work that sheds light on critical policy gaps. In the short term, this will directly impact vulnerable populations; in the long run, it will slow national development and progress. This goes against the very development we are all hoping to achieve,” continued Namala.
Even before the mass cancellations, the 2020 amendment to the FCRA had already made it significantly harder to carry out human rights work, say experts. The amendment introduced several restrictive measures, including barring NGOs from sub-granting foreign funds to other FCRA-registered organizations.
“Sub-granting was a very important part of most NGOs work. It allowed us to collaborate with grassroots organizations, and smaller organizations and reach the ground more strongly. Now that we can’t subgrant, we are unable to do any of those,” says Namala. The amendment also capped administrative expenses at 20 percent of an organization’s foreign funds, making it difficult to cover operational costs.
Sambhavna Trust Clinic, which has been a vital source of free specialized medical care for over 37,000 survivors of the Bhopal gas tragedy, was forced to shut down on December 31, 2024, after prolonged delays in renewing its FCRA registration. Founded in 1996 with support from donors around the world, the clinic has been the only facility in Bhopal dedicated to providing long-term health care to those affected by the Union Carbide gas disaster of 1984. (Survivors of the disaster are continuing to fight for remediation and reparations from Dow Chemical, which took over Union Carbide in 2001.) Since losing its FCRA registration in 2019, the clinic has faced mounting challenges. Its daily patient count has dropped from 180 to 200 to just 80 or so over the past five years. “Many essential medicines had to be discontinued, including the Nirgundi oil, which we developed as a safer alternative to harmful painkillers,” says Satinath Sarangi, managing trustee of the clinic.
By November 2024, the clinic ran out of funds and faced liabilities of more than $1.4 million. Staff salaries were slashed by 30 percent and operations ceased, says Sarangi. On January 1, 2025, clinic members led by the leaders of the Union Carbide Poison Victims Healthcare Rights Front, began a sit-in protest.
Fortunately, on the third day, they received their FCRA registration renewal. Sarangi says they are grateful for the decision, and operations have resumed. However, he remains unsure about what prompted the government’s swift action.
Silencing Civil Society
A source who worked at the same organization as Meera notes that words like “human rights” and “advocacy” had to be removed from their official documents because of fear of further intervention.
Anisha, who is using a pseudonym for concerns over professional retribution, says that she has seen a rise in persecution of organizations that undertake advocacy work that does not align with government interests and policies. “NGOs that purportedly present India in a bad light or NGOs promoting interests of minority groups are particularly targeted,” she adds.
In 2022, U.K.-based NGO Save The Children’s Indian counterpart Bal Raksha Bharat, one of India’s leading child rights organizations, came under the government’s radar after the Ministry of Women and Child Development objected to its fundraising campaign on malnutrition, on the ground that the issue was already being addressed by the government. In 2023, Bal Raksha Bharat lost its FCRA status. India has a high prevalence of malnutrition, ranking 105th out of 127 countries on the Global Hunger Index in 2024.
Legal Initiative for Forest and Environment (LIFE) is another NGO that lost its FCRA status in 2023. Ritwick Dutta, an environmental lawyer and a founder of LIFE, is currently mired in a Central Bureau of Investigation (CBI) case against him; the government alleges he was using foreign donations to fund legal activism to “take down India’s existing or proposed coal projects,” and “harm India’s national security.”
LIFE has played a key role in protecting environmental law and helping communities impacted by environmentally harmful projects. Many of these projects are pushed through by bypassing regulations, threatening people’s livelihoods, health and local ecosystems.
Dutta says that neither he nor LIFE has ever been a litigant in any legal case. LIFE relied on foreign funding for 75 to 80 percent of its budget, Dutta says, but with that support now entirely cut off, its work has come to a halt. “We are no longer conducting capacity-building programs, workshops, meetings, or other activities,” he adds.
In the case of Oxfam, LIFE and Environics, Dutta shares that the government first targeted them by revoking their nonprofit status under 12A of the Income Tax Act, which grants nonprofits tax exemptions. “This is the pattern. Once your 12A status is revoked, organizations also lose their ability to secure domestic funding, because it disincentivizes donors from contributing as their donations are no longer tax-exempt,” says Dutta.
Recently, the Income Tax Department revoked the nonprofit status of the Reporters’ Collective, a digital media outlet known for its investigative journalism, saying that their journalism does not serve any public purpose. The collective conducted a wide variety of investigations critical of the ruling government, including reporting on the government’s role in helping coal miners greenwash their violations of environmental laws, as well as on a questionable solar power auction orchestrated by the Modi government that laid the groundwork for an infamous bribery scandal.
Dutta feels that there is a pattern to all these decisions — shutting down voices critical of the government. “The easiest way to silence an organization is through FCRA. If you have FCRA, you can be shut down at any time. No organization with FCRA will dare to speak against the government.”
Dutta, who is challenging the charges, anticipates a prolonged legal battle. When asked about its impact on organizations, he notes that the repercussions extend beyond his case. “It has affected training and capacity building around environmental law. Now there’s a sense of fear among organizations and they will think twice before proceeding with their work,” he says.
That sense of fear is also palpable in the U.S., where rights groups consider what could be coming if HR 9495 becomes law under a Trump administration, offering what the ACLU has called, “a blank check for presidents to shut down organizations that criticize them.” Oxfam has even warned that the bill follows the same “playbook” that other governments worldwide use to crush dissent. If India’s experience is any indication, the passage of this bill could lead to a severe contraction of civil society space, mirroring the shrinking landscape of activism and advocacy in India.
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Ankita Dhar Karmakar is an independent journalist who reports on gender issues, human rights and education, among other beats. Her work has been featured in BehanBox, The Wire, Swaddle and Sabrang Media. Ankita has worked as a staff reporter at BehanBox, a digital media platform focusing on gender journalism. She is the recipient of the 4th South Asia Laadli Media & Advertising Award For Gender Sensitivity and the 14th Laadli Media Award.
