The so-called Intermediary Guidelines and Digital Media Ethics Code was announced by New Delhi last month and is legally enforceable.

It also regulates big social media firms such as Facebook and Twitter.

In its petition in the Delhi High Court, the Foundation for Independent Journalism, which publishes 'The Wire' news portal, argued the rules formulated under India's Information Technology Act cannot govern online news media.

"It goes far beyond anything which can be acceptable in a democracy," Nitya Ramakrishnan, the Foundation's lawyer said during a virtual court hearing.

The rules lay a three-tier regulatory structure for news media including an oversight mechanism by the federal government, sparking concerns that it will curb the freedom of press to report independently.

The case will next be heard on April 16.

The rules are part of Prime Minister Narendra Modi's efforts to regulate online content including on social media and streaming platforms such as Amazon's Prime Video and Netflix.

(Reporting by Sankalp Phartiyal; Editing by Lincoln Feast and Michael Perry)

By Sankalp Phartiyal