The Supreme Court of India Friday upheld a series of amendments to the Foreign Contribution (Regulation) Act 2010 (FCRA) to strictly regulate the flow and utilisation of foreign contributions by organisations into the country.

In the case before the court, the petitioners had challenged the constitutionality of provisions like Section 7, which forbade a recipient of foreign contribution from further transferring the same to any other entity, and the proviso to Section 11(2), which empowered the state to direct an organisation against the utilisation of foreign contributions during the pendency of inquiry for suspected violations of the FCRA.

They also challenged Sections 12 and 17, which mandated all foreign contributions to be deposited in an FCRA-specific account created in a specified branch of a scheduled bank. The individuals and NGOs challenged the amendments for violating their fundamental rights to equality, life and liberty as well as the freedom of speech, association and profession under the Constitution of India.

The government argued that the amendments were necessary to prevent the diversion of foreign funds and to allow regulatory agencies to effectively monitor the ultimate utilisation of the funds. It stated that the law was uniformly applicable to all NGOs and did not altogether bar any person to transact in foreign contributions.

The court accepted the government’s submissions, ruling that there can be no fundamental right to receive foreign contributions or foreign exchange. It found that no fundamental rights were violated since the restrictions introduced by the amendments were “reasonable,” with a “legitimate purpose” and based on an “intelligible criteria.”

The judgement, authored by Justice AM Khanwilkar, also observed that “free and uncontrolled flow of foreign contribution has the potential of impacting the sovereignty and integrity of the nation, [] public order and also working against the interests of [the] general public.”

The formal inflow of foreign contributions into India almost doubled between 2010 and 2019. Several organisations registered under the FCRA have failed to comply with the statutory requirements, leading to more than 19,000 organisations losing their registration certificates. The UN High Commissioner for Human Rights, Michelle Bachelet, previously expressed concern over how the amendments limit the “space for human rights NGOs” in India.