My understanding is that there is no policy frame for international NGOs to operate in India except to execute a project funded by an international agency. For this they are provided a project office status by RBI and these NGOs can exist so long as the project lasts. This permission by RBI is provided under Foreign Exchange Management Act (FEMA), an act primarily meant to manage and regulate foreign exchange reserve and is targeted to private sector trading or commercial entities. Unfortunately, most international NGOs have misused this provision and even RBI has gone beyond its mandate and provided permission to international NGOs to operate as a liaison offices. In the garb of liaison offices, these NGOs carry out full scale operations and have found it a convenient way to establish themselves permanently in India. This is gross violation of the law and this has limited the growth local Indian NGOs that are capable of professional services.

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