India has cancelled a visa it gave to an exiled Uighur dissident, an official said Monday, after China protested and described him as a "terrorist" wanted by Interpol.

Dolkun Isa, a Germany-based activist from China's Xinjiang region, was due to attend a conference on democracy next week in the Indian hill town of Dharamsala, the headquarters of the Tibetan government-in-exile and home of the Dalai Lama.

"His (Isa's) visa has been cancelled, that is all we can confirm at this point," home ministry spokesman K.S. Dhatwalia told AFP without giving a reason for the move.

Last week India had granted Isa a tourist visa, reportedly in retaliation for China blocking its request to add Masood Azhar, head of the Pakistani militant group Jaish-e-Mohammad, to a United Nations' sanctions blacklist.

Beijing reacted angrily to New Delhi's move, describing Isa as a wanted "terrorist".

"Dolkun is a terrorist in red notice of the Interpol and Chinese police. Bringing him to justice is due obligation of relevant countries," Chinese foreign ministry spokesperson Hua Chunying said last week.

Xinjiang is home to the mostly Muslim Uighur minority, many of whom say they face cultural and religious repression, and the area is regularly hit by violence which Beijing blames on Islamist separatists.

Isa, now a German citizen and chairman of the Munich-based World Uyghur Congress that represents the rights of Chinese Uighurs around the globe, said he was disappointed by India's latest decision.

"I express my disappointment on Indian authorities' cancellation of my visa," he said in a statement on the group's website.

"I recognize and understand the difficult position that the Indian government found itself, and regrets that my trip has generated such unwarranted controversy."

Prime Minister Narendra Modi's political opponents criticised the apparent flip-flop, with many accusing his government of buckling under Chinese pressure.

"Modi Ji's latest foreign policy disaster on China (#DolkunIsa) can be termed as a Himalayan blunder," Congress party spokesman Sanjay Jha said on Twitter.