In its annual report, the Congress-mandated US Commission for International Religious Freedom (USCIRF) asked the Indian government to publicly rebuke officials and religious leaders that make derogatory statements about religious communities.
"In 2015, religious tolerance deteriorated and religious freedom violations increased in India," the report said.
Members of USCIRF were denied visas by Indian government early this year on the argument that religious freedom is enshrined in the constitution and any foreign third party has no locus standi to comment or investigate on it.
"Minority communities, especially Christians, Muslims, and Sikhs, experienced numerous incidents of intimidation, harassment, and violence, largely at the hands of Hindu nationalist groups," the report alleged.
USCIRF alleged that members of the ruling BJP tacitly supported these groups and used religiously-divisive language to further inflame tensions.
"These issues, combined with longstanding problems of police bias and judicial inadequacies, have created a pervasive climate of impunity, where religious minority communities feel increasingly insecure, with no recourse when religiously-motivated crimes occur," said USCIRF which has retained India in the Tier-2 Countries on religious freedom.
India has been placed in Tier-2 since 2009. Others listed in the Tier-2 countries are Afghanistan, Azerbaijan, Cuba, Indonesia, Kazakhastan, Laos, Malaysia, Russia and Turkey.
It has recommended to the State Department to designate eight countries Central African Republic, Egypt, Iraq, Nigeria, Pakistan, Syria, Tajikistan and Vietnam as countries of particular concern or CPC.
USCIRF recommendations are not binding on the State Department, which has so far put nine countries in this list Myanmar, China, Eriteria, Iran, North Korea, Saudi Arabia, Sudan, Turkmenistan and Uzbekistan.
Stating that though it has again placed India on Tier 2, where it has, been since 2009, USCIRF noted that the largest democratic country of the world "is on a negative trajectory" in terms of religious freedom.
Observing that it will continue to monitor the situation closely during the year ahead to determine if India should be recommended to the State Department for designation as a "country of particular concern," USCIRF urged the US to integrate concern for religious freedom into bilateral contacts with India, including the framework of future Strategic Dialogues, at both the federal and provincial level.
USCIRF praised US President Barack Obama for raising this issue during his visit to India in January 2015.
"During his January 2015 visit to India, President Obama gave a major speech highlighting the need for religious tolerance and freedom, and he reiterated the point at the February 2015 National Prayer Breakfast in Washington, DC," the report said, adding that this had an impact.
"Notably, the Prime Minister of India subsequently gave a major address about these concerns. As this example demonstrates, one of the most direct ways to stress the importance of religious freedom is in high-profile public events," USCIRF said.
In mid-February 2015, at an event honouring Indian Catholic saints, Modi stated publicly, for the first time, that his government "will ensure that there is complete freedom of faith and that everyone has the undeniable right to retain or adopt the religion of his or her choice without coercion or undue influence," the report said.
"This statement is notable given longstanding allegations that, as Chief Minister of Gujarat in 2002, he was complicit in anti-Muslim riots that occurred in that state," it said.
The report rued that the states of Uttar Pradesh, Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Odisha, Karnataka, Madhya Pradesh, Maharashtra, and Rajasthan tend to have the greatest number of incidents of religiously-motivated attacks and communal violence, as well as the largest religious minority populations.
Referring to a recent Union Home Ministry report, USCIRF said India in 2015 experienced a 17 per cent increase in communal violence. In 2015, 97 people were killed, and 2,246 people injured, it added.
The report rued that the Indian courts are still adjudicating cases stemming from large-scale Hindu-Muslim communal violence in Uttar Pradesh (2013) and Gujarat (2002); Hindu-Christian communal violence in Odisha (2007 2008); and Hindu-Sikh communal violence in Delhi (1984).
NGOs, religious leaders, and human rights activists allege religious bias and corruption in these investigations and adjudications, it said.
"Additionally, religious minority communities claim that eye-witnesses often are intimidated not to testify, especially when local political, religious, or societal leaders have been implicated in cases," the report alleged.
In February 2016, the first major verdict of the 2013 Muzaffarnagar riots acquitted 10 people charged with arson and murder for lack of evidence, it said.
Six rape cases registered with police are pending in the courts or are still being investigated.
In August 2015, the Indian government gave a 15,000 rupee (USD 225) compensation to 12 victims of the Odisha violence; other court cases are still pending.