We understand that there have been some changes in the regulatory framework, and we would like to confirm whether FCRA funds can continue to be used for overseas travel undertaken as part of a project funded through foreign contribution. Specifically, we would appreciate your advice on:
Whether international travel expenses can be charged to an FCRA-funded project.
If there are any new restrictions or conditions introduced under the recent FCRA amendments.
Any compliance requirements or documentation that should be maintained while processing such expenses.
Thanks for your query. Please see Explanation 2 to sub rule 5 of rule 9 of FCR Rules as amended in June 2026 which states:
Explanation: For the removal of doubts, it is hereby clarified that the foreign contribution so received shall be utilised only for activities carried out in India in accordance with the association’s stated objectives and for the purposes for which such contribution has been received.
So the clarity covers 2 points: (a) FC to be used for the purpose (project/activity) for which it has been received and (b) FC be utilised for activities carried out in India.
While the point (a) can easily be demonstrated point (b) has two interpretation (i) strict interpretation meaning activities carried out within the geography of India only or (ii) liberal interpretation meaning foreign travel like conference, training etc is essential and helped in better utilization of FC for the activity (approved in the project) within India.
In our opinion, while foreign travel unrelated to the project should be strictly avoided, the strict interpretation of FC utilised only for activities carried out in India is what MHIA seems to indicate. However, if a project has activity which can be implemented/improved in India through capacity enhancement outside India may still pass the test but with sufficient justification and documentation. The phrase 'utilised only for activities carried out in India ’ is what is open to interpretation (strict or liberal).