The two-day 'Great Live Music Festival' organised by a Russian company was to start in Goa yesterday, but state government withdrew its consent at short notice.
Well-known bands from India such as Indian Ocean and Parikrama as well as Russian bands were to perform at the festival.
"We consider the disruption of the festival to be shameless and frankly unfriendly gesture on the part of state authorities," Alexey Mzareulov, Deputy Consul General of the Russian Federation in Mumbai told reporters.
In New Delhi, the Russian Embassy came out with a strongly worded statement asking the state government to stop further hostility to Russian tourists in Goa, who make a significant financial contribution to the development of the state.
"Disruption of the International Music Festival - Great Live Music 2014, organized by a Russian company, in Goa from January 31-February 1 is an insolent and a starkly unfriendly gesture of the state authorities," it said.
It said the refusal to grant permission to hold it made under a contrived pretext at the last moment has angered many Indian and international musicians, numerous guests and contradicts common sense.
"It will inevitably affect the popularity of this tourist region," the statement added.
The statement said that an attempt to link this wonderful large-scale cultural event, which acquired so much popularity since its first time a year ago and was eagerly awaited by thousands of tourists, to the scandal over the local taxi drivers carrying Russians looks provocative.
It said that such rash actions do not go in line with the intention stated by the Goa government to turn this place into a world-class resort.
"Moreover, they contradict the traditions of friendship and mutual understanding which the peoples of Russia and India enjoy. The Embassy hopes that the state authorities will manage to find a worthy way out of this situation," the statement added.
Local BJP MLA Michael Lobo had opposed the event, saying that it was being held in the vicinity of a church.
Mzareulov said refusal under "false pretences" at the last moment had angered Indian and international musicians.
"Such reckless actions are contrary to the state's intention to turn itself into world-class resort" and also contrary to the traditions of friendship and mutual understanding between the Russian and the Indian peoples, he said.