India on Thursday suspended Greenpeace India's foreign funding licence, the latest move against the environmental watchdog after the government accused it of hurting the country's economic interests.

India's home ministry issued a notice saying the ban was imposed after an audit of the environmental group's bank accounts in September revealed the organisation had violated rules governing foreign funding and withheld information on transactions.

"The government hereby suspends the registration of the association," the ministry said on its website.

"The government is satisfied that the acceptance of foreign contribution by the said organisation has prejudicially affected the public interests... and has prejudicially affected the economic interest of the state in violation," it said.

Greenpeace India Thursday said it is yet to receive any official notice of the ban, adding that "it will not be cowed down by a campaign against dissent".

"This is a smear, pure and simple," the group's executive director Samit Aich said in a statement.

The latest suspension is for an initial 180 day period, but the government has asked the group to explain why it should not be barred permanently, and given them 30 days to appeal.

In June New Delhi froze Greenpeace India's bank accounts after its intelligence agency accused them of hurting the country's economic progress by "stalling development projects" following protests by the group that delayed important industrial projects.

A Delhi court in January asked Prime Minister Narendra Modi's new government to unblock funds totalling more than $272,000, but no action has yet been taken, the group says.

"All of this was put before the Delhi High Court when we brought a case against the Centre, and the court decided in our favour," Aich said.

The campaign group receives 70 percent of its funding from Indian donors living in India, Aich added.