India's government said on Monday it has evidence showing some Rohingya in the country have ties to "terror organisations" and pose a security threat that justifies a mass deportation of the ethnic group.

India's home ministry said it would confidentially share intelligence information with the Supreme Court showing Rohingya links with Pakistan-based armed groups, in a bid to get legal clearance for plans to deport 40,000 Rohingya.

The Supreme Court is hearing an appeal lodged on behalf of Rohingya against the deportation plan proposed by Prime Minister Narendra Modi's Hindu nationalist government.

India's home ministry submitted an affidavit to the court arguing the hardline stance was justified by the security threat posed by illegal immigrants from the majority-Muslim Rohingya ethnic group, hundreds of thousands of whom have fled from Myanmar to Bangladesh, from where many have crossed into India.

"The court has no business to interfere in such matters of what they call illegal immigrants or illegal migrants," the government said in the affidavit.

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Additional Solicitor-General Tushar Mehta told the court the government would provide evidence of Rohingya links with "extremist groups" and illegal transfers of money at the next hearing.

The lawyer representing the Rohingya denounced the move.

"This is clearly a case of religious discrimination and an attempt to arouse an anti-Muslim feeling," Prashant Bhushan said.

The ministry said the influx of large numbers of Rohingya into India began four to five years ago, long before an exodus that saw more than 400,000 Rohingya flee to Bangladesh since August 25 to escape a Myanmar military offensive that the United Nations has called "ethnic cleansing".

The affidavit went on to say the government had reports from security agencies and other credible sources "indicating linkages of some of the unauthorised Rohingya immigrants with Pakistan-based terror organisations and similar organisations operating in other countries".

It also said there was information on Rohingya involvement in plots by the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) and other "extremist groups" to ignite communal and sectarian violence in India.

Senior home ministry official Mukesh Mittal said the Indian government would privately show the court material gathered from "sensitive investigations" to substantiate the claims in its affidavit.

Bhushan will file a rejoinder to the government's affidavit, his office told Reuters news agency.

The court will next hear the matter on October 3.

Meanwhile, police said on Monday they had arrested a suspected member of al-Qaeda who they believed was trying to recruit Rohingya living in India to fight security forces in Myanmar.

Senior police officer Pramod Kushwaha said British national Shauman Haq, 27, was arrested near a bus stop in New Delhi on Sunday. He had come to India via Bangladesh.

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Rohingya in India voiced worries that they were being unfairly tainted by the allegations and sought more understanding for their plight.

"We feel helpless and hopeless," said Rohingya youth leader Ali Johar, who came to India in 2012 and lives with his family in a Delhi settlement.

"The world's largest democracy has given us shelter, but they should handle this situation more empathetically."

Modi's government has been criticised by activists for not speaking out against Myanmar's recent military offensive against Rohingya fighters, and right-wing groups in India have begun vilifying Rohingya living there.

The Rohingya are denied citizenship in Buddhist-majority Myanmar and regarded as illegal immigrants, despite claiming roots that date back centuries. More than 800,000 Rohingya currently live in Bangladesh.