Greenpeace's India branch has been banned from receiving foreign donations, in the latest crackdown by the authorities against environmental and development charities with international connections.
The nationalist government of Narendra Modi has cancelled or restricted the foreign funding licences of nearly 9,000 non-governmental organisations (NGOs) since he was elected prime minister last year.
Greenpeace India has been a particular target for Indian leaders who accuse it of promoting a liberal Western agenda to hamper the country's economic development by campaigning against mining and nuclear projects.
India has now cancelled the licence which allows the environmental group to collect money from overseas, a move that could seriously restrict its activities in the country.
The charity is expected to begin a court challenge against the decision. It is accused of violating rules on foreign funding, withholding financial information and damaging the country's economic interests.
Vinuta Gopal, a senior Greenpeace India official, said the move was "a desperate attempt to get us to cease our work" and "yet another attempt to silence criticism".
In January, Priya Pillai, a prominent Indian campaigner with Greenpeace, was told at Delhi airport that she could not board a plane for a scheduled visit to Britain. Two months later, the Delhi high court declared that the order was illegal, despite the government's argument that Ms Pillai intended to foster a "negative image" of India that could discourage prospective investments.
Other leading NGOs, including the Ford Foundation, a major US-based philanthropic agency, and the Christian charity Caritas, were placed on a watch-list that requires every rupee of foreign donations to be approved by the home ministry in a laborious bureaucratic process.
The BJP's suspicions of foreign NGOs chime strongly with many Indians who believe Western influences are trying to restrict their economic growth.
In an earlier clash with Greenpeace, the government froze its bank accounts and suspended its foreign funding licence in April, but the following month a Delhi court overturned the administration's moves.
The group's criticisms have infuriated the government which has accused it of "stalling development projects" by protesting against infrastructure plans.
According to Indian media, a report by the main intelligence agency warned that delays to development projects being sought by Greenpeace and other groups could knock up to three percentage points off the annual growth rate.
Ms Gopal struck a defiant note in response to what she called "this latest melodrama". She said: "Since the majority of our funding comes from Indian citizens, most of our work can indeed continue. We are confident that people will show they are ready to fight back in style, and send a clear message to those in power: you just can't muzzle dissent in a democracy."