External Affairs Ministry Spokesperson Vikas Swarup said India's credentials as a vibrant democracy and pluralistic society with a strong civil society are well known and need no reiteration.
He also emphasised that the government is fully committed to the Constitutional principles which "underpin the nation of 1.25 billion people as a multi-ethnic and multi-religious society with an abiding commitment to inclusion and tolerance".
"There is a well-established legal framework for NGOs to conduct their operations in India. This is borne out by the presence of over three million NGOs in the country, one of the largest NGO networks in the world. India welcomes lawful operation of foreign NGOs in India.
"Government of India looks forward to continuing to work with the US Congress and Administration to foster mutual understanding and deepen India-US bilateral relations," he said.
Congressman Ed Royce, Chairman of the powerful House Foreign Relations Committee, joined by some other lawmakers and representations of human rights bodies and Compassion International (CI), had rued that the recent effort to regulate foreign funding and enforce taxation laws had made it impossible for them to carry out work among poor children in India.
CI, a Christian charity organisation has often been accused of being engaged in religious conversions in India.