India on Tuesday said the Bangladesh interim government's decision to ban all activities of former prime minister Sheikh Hasina's Awami League party is "concerning".

New Delhi also called for early holding of "free, fair and inclusive" elections in Bangladesh.

Bangladesh's interim government headed by Muhammad Yunus decided to ban the Awami League under the Anti-Terrorism Act on May 12.

"The ban on the Awami League without due process is a concerning development," External Affairs Ministry Spokesperson Randhir Jaiswal said.

"As a democracy, India is naturally concerned at curtailment of democratic freedoms and shrinking political space. We strongly support the early holding of free, fair and inclusive elections in Bangladesh," he said at a media briefing.

Dhaka has said all activities of the Awami League and all its affiliated bodies would be banned until the trial of party leaders and members are completed by the International Crimes Tribunal.

After India's reaction, Yunus' spokesperson Shafiqul Alam said in a statement that the ban is necessary to protect Bangladesh's national security and sovereignty, ensure the safety of activists who participated in the movement against Hasina's government, and to safeguard plaintiffs and witnesses of the International Crimes Tribunal.

There has been a sharp downturn in India-Bangladesh relations after deposed prime minister Sheikh Hasina fled Dhaka in August last year in the face of a massive anti-government protest.

The relations nose-dived dramatically after the interim government headed by Muhammad Yunus failed to contain attacks on minorities, especially Hindus, in that country.