The United States Commission on International Religious Freedom (USCIRF) said it was "deeply troubled" by the passage of the controversial Citizenship Amendment Bill (CAB) in Lok Sabha and sought sanctions against Union Home Minister Amit Shah and other principal leadership if it is passed by the Rajya Sabha.
The USCIRF claimed that the proposed legislation introduces a religious test for citizenship.
The bill was passed on the midnight of December 10 after the division of votes with 311 in its favour and 80 against it.
The Bill would now be moved in the Rajya Sabha on Tuesday to cross its final hurdle before becoming a law to provide Indian nationality to Hindus, Christians, Sikhs, Parsis, Jains and Buddhists fleeing persecution in Pakistan, Afghanistan and Bangladesh.
"If the CAB passes in both Houses of Parliament, the US government should consider sanctions against the Home Minister and other principal leadership," the USCIRF said.
The government body does not have the power to sanction anyone or any government but can make recommendations that can be followed up.
The USCIRF said: "The CAB enshrines a pathway to citizenship for immigrants that specifically excludes Muslims, setting a legal criterion for citizenship based on religion. The CAB is a dangerous turn in the wrong direction; it runs counter to India's rich history of secular pluralism and the Indian Constitution, which guarantees equality before the law regardless of faith.
"In conjunction with the ongoing National Register of Citizens (NRC) process in Assam and nationwide NRC that the Home Minister seeks to propose, the USCIRF fears that the Indian government is creating a religious test for Indian citizenship that would strip citizenship from millions of Muslims."
Shah has stated categorically that "the Bill does not affect the Muslims residing in this country. The Muslims residing here will not face any problem. They live with dignity and will live with the same dignity."
The intent of the CAB, though, is to help victims of religious persecution.
Shah said that the Muslim community was not persecuted in those three Islamic countries, and the Bill specifically seeks to provide citizenship to six the religious persecuted minorities.
He said in the Lok Sabha: "The people of the six minority communities who migrated to India following religious persecution in Pakistan, Bangladesh and Afghanistan will be given Indian citizenship as per this Bill," adding that it does not violate the Indian Constitution.
The Minister added that the "Rohingya will never be accepted as citizens of India. They infiltrated India through Bangldesh".
Last month, the USCIRF released a report criticising the NRC, which it said leaves out 1.9 million Muslims living in Assam.
USCIRS Chair Chair Tony Perkins said: "The updated NRC list and subsequent actions of the Indian government are essentially creating a religious test for citizenship to target Assam''s vulnerable Muslim community."