India’s crackdown on foreign aid will claim its most prominent casualty this month, as a Colorado-based Christian charity that is one of India’s biggest donors closes its operations after 48 years, informing tens of thousands of children that they will no longer receive meals, medical care or tuition payments.

The shutdown of the charity, Compassion International, on suspicion of engaging in religious conversion, comes as India, a rising economic power with a swelling spirit of nationalism, curtails the flow of foreign money to activities it deems “detrimental to the national interest.”

More than 11,000 NGOs have lost their licences to accept foreign funds since Prime Minister Narendra Modi took office in 2014. Major Western funders — among them George Soros’ Open Society Foundations and the National Endowment for Democracy — have been barred from transferring funds without permission from the Government of India (GOI).

But few have been as vocal about their struggle as Compassion International, which solicits donations through its $38-a-month “sponsor a child” programme and distributes them through church-affiliated service centres. It has repeatedly ranked as India’s largest single foreign donor, transferring around $45 million a year.

Its executives vehemently deny the government’s allegation that it is funding religious conversions, and say India has given them no opportunity to rebut the accusation. Instead, they say they found themselves in murky back-channel negotiations with a representative of the Rashtriya Swayamsevak Sangh, or RSS, that is closely connected with the governing BJP but that has no official role in governance.

“You think, ‘Wow, am I negotiating with the government or am I negotiating with an ideological movement that is fuelling the government?'” said Santiago Mellado, Compassion International’s chief executive officer, in a telephone interview from the charity’s offices in Colorado Springs. He added that a briefing on the situation would be submitted to the Trump administration this week.

A spokesman for GOI’s Ministry of Home Affairs (MHA), which oversees regulation of foreign charities, declined repeated requests for comment on the case. A Foreign Ministry official, speaking on condition of anonymity, follow­ing diplomatic protocol, said Compassion International’s partners were violating Indian law by engaging in religious activities, and that the organisation declined a government offer to re-register as a religious organisation, which would have allowed it to continue its work in India.

Religious charities, which make up half of the dozen top international donors to India, are watching the case closely, Mellado said. “What we hear from our friends in India is that it would be tragic if they were successful in shutting down Compassion, because that would leave other ministries very vulnerable,” Mellado said. “They are feeling like they’re next.”

India has long had a law regulating the use of foreign aid, but Modi’s government has applied it in rigorous fashion, cancelling the registrations of more than 10,000 non-governmental groups, mostly small ones, in 2015. That summer, income tax investigators began raiding offices affiliated with Compassion International, apparently seeking evidence that funds were being used to convert Indian families.

Sam Jebagnanam, a field officer based in Chennai, described the searches as “harrowing,” with staff members questioned through the night and forbidden from leaving the office, summoning a lawyer or ordering food. The inv­estigators, he said, focused their questions on a vacation Bible school funded by the charity. Seventy-six per cent of the children served by the programme are Hindu, and 28% are Christian.

At another raid, he said, a top executive was interrogated under oath at 3 am. “They kept asking him, ‘Why did you have a spiritual component to the programme? What do you do in the area of spiritual development?'” he said. “We said we teach moral values; we do not force anyone into religion.”

Compassion International executives learned early last year, from an item in a newspaper, that their group had been added to the list of organisations whose transfers required prior permission by the MHA, said Stephen Oakley, Compassion’s general counsel.

By summer, $600,000 in donations was stuck in an Indian bank account awaiting permission that did not come. In November, two of the group’s main affiliates — in Chennai and Kolkata — were denied authorisation to use foreign funds. In the US, Mellado was pressing, with an increasing sense of urgency, for an opportunity to plead his case with Indian officials.

But the only interlocutors they could find were through unofficial channels. In October, a Washington-based representative of the RSS, Shekhar Tiwari, reached out to John Prabhudoss, who heads an umbrella organisation of Indian-American Christians and has a long association with Compassion International and its leaders, Prabhudoss said.

Mellado said he was puzzled by the indirect outreach, but decided to give it a try. “We are trying to navigate through understanding of the dynamics on the Indian side,” he said. “We understand that the BJP and the RSS are tied together somehow, so it seems to us that we also need to be talking to the RSS.”

Through Prabhudoss, Tiwari put forward a proposal: The government might view Compassion International more favourably if the charity routed a portion of its $45 million in annual charitable donations away from churches and through non-Christian aid groups, including Hindu ones. “They were asking me, ‘How do you think we can solve this problem?’” Tiwari said. “I told them, instead of having all your partners Christian, have some Buddhists, Hindus, Jains, Sikh organisations.”

Law enforcement action

Prabhudoss and Mellado both said that the suggestion was to fund RSS-affiliated organisations, though Tiwari denies suggesting that. They rejected the idea, which they viewed as “inappropriate,” Mellado said. An official from India’s Ministry of External Affairs denied that the RSS representative had any role in the government’s actions, calling the discussion “totally extraneous to the law enforcement action.”

Things went downhill quickly after that. In early January, Oakley, the general counsel, went to New Delhi to plead his case to Foreign Secretary, S Jaishankar, in a meeting also attended by the second-ranked US diplomat in India. It was the first and last meeting between the charity’s leaders and government officials, and Oakley described it as bitterly contentious.

Last week, word went out to the group’s 500 Indian partners that they would have to shut down their operations. Among them is Bethesda Charitable Endeavours, which funds a community centre in Haldwani, in the Himalayan foot­hills. The centre’s employees have cleared out four of their nine rented rooms, and 250 child­ren have been told not to return there. Pramod Dass, who directs the charity, organised a moro­se little closing ceremony last week in his office.

Already, 15,000 of the 1,45,000 Indian children regularly receiving services through Compassion International have been severed from the programmes. Beginning Friday, the sponsors will be contacted individually, at the rate of 2,500 per day, and asked to transfer their sponsorships from Indian children to children from other countries. “That process is irreversible,” Mellado said. “We would have to start all over in India, and for 1,45,000 children, it will take years.”