Washington: In a diplomatic victory for India, the US on Wednesday designated Pakistan-based militant outfit Hizbul Mujahideen (HM) as a Foreign Terrorist Organisation and as a Specially Designated Global Terrorist (SDGT) organisation.

In an order, the US State Department said the designation of the HM as a terror organisation would deny it the resources it needs to carry out terrorist attacks, its assets in the US would be frozen, and US citizens prohibited from engaging with the group.

The US action comes a day after US President Donald Trump spoke on the phone with Prime Minister Narendra Modi and congratulated him on the occasion of Independence Day. During the talk, both sides also decided to set up a new 2-by-2 ministerial dialogue to elevate their strategic consultations.

Trump and Modi also said they look forward to the Global Entrepreneurship Summit in India this November, in which the US President's daughter Ivanka Trump is to lead the US delegation.

The US State Department move also comes as the first ever shipment of American crude oil to India is taking place from Texas this month. Trump, during his talk, also pledged that the US would continue to be a reliable, long-term supplier of energy.

The terror tag on the outfit would come as a blow to Pakistan, whose top leaders have openly described Hizbul commander Burhan Wani, who was killed in a gunfight last year, as a martyr.

The US State Department statement said: "The Department of State has designated Hizbul Mujahideen -- also known as Hizb-ul-Mujahideen, also known as HM -- as a Foreign Terrorist Organisation under section 219 of the Immigration and Nationality Act, and as a Specially Designated Global Terrorist (SDGT) under section 1(b) of Executive Order (E.O.) 13224. These designations seek to deny HM the resources it needs to carry out terrorist attacks. Among other consequences, all of HM's property and interests in property subject to US jurisdiction are blocked, and US persons are generally prohibited from engaging in any transactions with the group.

"Formed in 1989, HM is one of the largest and oldest militant groups operating in Kashmir. Hizbul Mujahideen is led by Specially Designated Global Terrorist Mohammad Yusuf Shah, also known as Syed Salahuddin. Hizbul Mujahideen has claimed responsibility for several attacks, including the April 2014, explosives attack in the state of Jammu and Kashmir, which injured 17 people.

"Today's action notifies the US public and the international community that HM is a terrorist organisation. Terrorism designations expose and isolate organisations and individuals, and deny them access to the US financial system. Moreover, designations can assist the law enforcement activities of US agencies and other governments."