The US has been critical of the Indian government's action against NGOs particularly Greenpeace which was barred from receiving foreign funds and whose registration was cancelled in September last.
Washington had expressed worries about the "potentially chilling effects of such actions".
Obama made a reference to the civil society groups in the course of an interview to PTI while answering a question on his goals for the India-US relationship in the last year of his presidency.
The President emphasised that there was much more that the US and India can do together and went on to say "India can be a strong voice in support of the universal rights and dignity of all people, regardless of background or religion.
"We need to support, not stifle, the civil society groups that strengthen communities", he remarked cryptically.
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