India's top court on Wednesday ordered the release on bail of an editor jailed in connection with a case alleging his news website received Chinese funding.
Prabir Purkayastha was arrested last year after a New York Times investigation alleged his English-language outlet NewsClick had been financially supported by a network pushing Chinese propaganda.
Relations between New Delhi and Beijing are tense due to a long-running border dispute that devolved into a deadly troop clash in the Himalayas in 2020 and sent diplomacy between the two nations into deep freeze.
The Supreme Court on Wednesday ruled that Purkayastha's arrest by the Enforcement Directorate, India's financial crimes agency, was illegal since it failed to communicate the grounds for detention in writing to him.
Justices B.R. Gavai and Sandeep Mehta declared his arrest "invalid in the eyes of law" and said he should be released, subject to furnishing of bail bonds.
The court said that its ruling on Purkayastha's confinement was not a statement on the merits of the ongoing case against him.
Last year the New York Times reported that NewsClick was financed by US millionaire Neville Roy Singham, saying it "sprinkled its coverage with Chinese government talking points" -- claims Singham rejected.
The report also accused Singham of working closely with Beijing and of "financing its propaganda worldwide".
Purkayastha, who has also denied the claims, was arrested under the Unlawful Activities Prevention Act (UAPA), a stringent anti-terror law under which formally charged suspects are almost never bailed.
His arrest had raised international concerns over the situation for media in a country where press freedom has nosedived since Prime Minister Narendra Modi came to power in 2014.
India has dropped from 140 to 159 on its rankings of media freedom, according to Reporters Without Borders.
Journalists critical of the government complain of harassment, and critics say Modi's government has sought to pressure rights groups by scrutinising their finances and clamping down on foreign funding.