Open Doors World Watch Research says the proposal to repeal a law against allowing members of two political groups to work in central government serve as "yet another alarm-signal for the Church in India".
Repealing the law would allow people belonging to the right-wing Hindu nationalist party Rashtriya Swayamsevak Sangh (RSS) and the Islamic group Jamaat-e-Islami to work in government departments.
Rolf Zeegers, persecution at Open Doors World Watch Research said the current law "made sure extremist movements would not be able to influence government services."
"Now they [the government] are removing all existing barriers to allow groups that were formerly considered extremist to take part in government affairs," he added.
Meanwhile, Catholic leaders in India are calling for a multi-faith discussion about the plans, which would see the law replaced with a new civil code.
Indian Cardinal Baselios Cleemis said: "All discussions on the uniform civil code must be done taking into account the freedom ensured by the Constitution and without hurting the sentiments of various religious groups".