The US on Thursday said it will take up with India the shutting down of a Colorado-based donor NGO and sought a "transparent process" for foreign NGOs in the country, saying the Christian charity has been facing "significant challenges" for some time.

Compassion International is said to be shutting down its India operations after it was put under 'prior permission category' in May, 2016. When a donor organisation is put under this category, it is barred from funding any Indian NGO without the government's approval.

In December, the Home Ministry said it was unlikely to reconsider the decision, notwithstanding appeals by American authorities.

"NGOs do valuable work overseas. Certainly these countries and governments have their own reasons for the laws they pass, but we believe it should be transparent and clear why they're shutting down these organisations," State Department's acting spokesman Mark Toner told reporters.

He said the US will take up the matter with India.

"Certainly, we'll raise that with the Indian government," he said.

He expressed concern that foreign NGOs had to face challenges to run their operations in India. "Unfortunately, we have seen over the past couple of years a number of foreign-funded NGOs in India that have encountered significant challenges in continuing their operations," Toner said, adding that the US has raised the issue with India through diplomatic channels.

He, however, said that because of the strong US-India relations "we can talk about these kinds of issues."

Toner said that "all parties" should work "cooperatively in a way that not only respects Indian laws, but also encourages a transparent process."

Santiago Mellado, Compassion International's chief executive officer, in a telephone interview to The New York Times said that a briefing on the situation would be submitted to the Trump administration this week.

The reports of the shutdown came amid allegations that the charity was engaging in religious conversion.

Other religious charities are watching the case closely, Mellado told the daily, adding, "What we hear from our friends in India is that it would be tragic if they were successful in shutting down Compassion, because that would leave other ministries very vulnerable."