India has cancelled the New Delhi-based Centre for Policy Research’s (CPR) licence to obtain international funding, the interior ministry said on Wednesday, just under a year after it suspended the permit on the grounds the think tank had broken the rules on grants.

Thousands of civil society groups in India have had their licences to receive overseas donations cancelled since 2014 after Prime Minister Narendra Modi’s government tightened surveillance on non-profit groups regulated under India’s Foreign Contribution Regulation Act (FCRA).

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CPR, an influential not-for-profit organisation that conducts research on a range of policy issues in India, said it was in “complete compliance” with the law and it would contest the cancellation.

“The basis of this decision is incomprehensible and disproportionate, and some of the reasons given challenge the very basis of the functioning of a research institution,” CPR President and Chief Executive Yamini Aiyar said in a statement.

She said the action’s impact on funding would prevent the think tank from being able to fulfil its purpose.

“This has undermined the institution’s ability to pursue its well-established objective of producing high quality, globally recognised research on policy matters,” she said.

Calling it a “matter of shame” India’s main opposition Congress party said the licence cancellation was “a death blow to India’s rich tradition of scholarship and rigorous thought”.

The government suspended its licence last February over suspected violation of the FCRA by using the funds for “undesirable purposes”, according to a Delhi High Court order. It did not explain further.

The interior ministry told the court last week that the licence was cancelled on Jan 10.

New Delhi did not renew Oxfam India’s FCRA registration when it lapsed at the end of 2021 and the country’s federal investigative agency started an investigation into allegations the charity broke funding rules.