India puts U.S. charity Ford Foundation on security watchlist

India has put the U.S.-based Ford Foundation, one of the world's largest charitable funds, onto a security watchlist as it probes its funding of a local organisation run by a prominent activist and critic of Prime Minister Narendra Modi.

India's home affairs ministry said it would "keep watch on all the activities" funded by the Ford Foundation and instructed the central bank to check with the government before passing any money from the New York-based group to local organisations.

All funds distributed by the foundation should be "utilized for bonafide welfare activities without compromising on concerns for national interest and security", the ministry said in a letter to the Reserve Bank of India published online.

The Ford Foundation, which has worked in India since 1952, said the Indian government was "reviewing information related to their ongoing investigation of Sabrang Communications and Publishing" and highlighted its work in India.

"We are confident in our work and compliance with the law and look forward to the outcome of this inquiry," the foundation said in a statement on Friday.

"We have been and continue to be deeply respectful of the laws of the land ... If the Government suggests methods by which we can strengthen and improve our grant-making processes, we will take appropriate steps to incorporate them."

No one from the Indian government was immediately available to comment further.

Sabrang, which is run by activist Teesta Setalvad with a mission to strengthen conflict resolution and peace building in Gujarat and Maharashtra, was given $250,000 by the Ford Foundation in 2009, the foundation's website said.

Last week Sabrang was accused by a state minister from Gujarat of misusing funds to create "communal disharmony", local media reported.

Setalvad and her husband are fighting accusations covered in the India media of embezzling funds meant for a museum to honour victims of the 2002 riots in Gujarat which led to the deaths of almost 1,000 people, mostly Muslims.

Setalvad is a long-time critic of Modi who was chief minister of Gujarat during the riots.

Human rights groups and political rivals have long alleged that Modi, a Hindu, allowed or even actively encouraged the 2002 violence but he has always vehemently denied the charge, and a Supreme Court inquiry found no evidence to prosecute him.

The Ford Foundation had almost $12 billion in assets at the end of 2013, and provides grants to groups in the United States, Asia, the Middle East, Africa and Latin America, focusing on education, democracy promotion and poverty reduction.

This is not the first time the Indian government has blocked foreign money to a local non-government organisation this year with funding to the local branch of Greenpeace blocked.

The move came after several months of Greenpeace activists accusing Modi's government of watering down environmental rules after it let industries operate closer to protected green zones.