Mumbai-born 61-year-old Kapoor, who was knighted by Queen Elizabeth II in 2013, has been an out-spoken critic of the Narendra Modi government.
"I stand alongside my colleague artists of India in solidarity with the courageous action of our writers, who have relinquished their awards in protest against intolerance in our country.
"Art can only have a home where there is tolerance. Fascism does not allow the possibility of creativity," he said in a statement here.
The London-based sculptor known for his unique installations goes on to question as to how any creativity or the possibility of expression exist in an "atmosphere of fear."
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"Our government encourages the hate that lies dormant in our great Indian psyche. Can our leaders not see that our tradition has always thrived on our openness and tolerance? We artists call for an end to murder and injustice in the name of the majority.
Kapoor's statement came as scientist P M Bhargava became the latest prominent personality to return his Padma Bhushan.
More than 35 authors have given up their Sahitya Akademi awards and five others have relinquished their posts in the literary body protesting against the recent killing of writers and "rising intolerance" in India.