Narendra Modi, chief minister of the western state of Gujarat, was to have visited Florida next week at the invitation of a Gujarati-dominated hotel owners' association.
Modi has been accused by opposition and human rights groups of doing little when he was chief minister in 2002 to stop riots in Gujarat in which up to 2000 Muslims were killed.
The rioting was triggered after claims that a Muslim mob torched a train carrying Hindu activists at Godhra, killing 59 people. A subsequent official report said the train fire was an accident.
"The government is ... greatly concerned at the decision of the government of the United States" to cancel an existing visa, Singh told parliament on Saturday.
"We have also called for the urgent reconsideration of this decision."
"Mr Modi as chief minister was responsible for the performance of state institutions at the time in Gujarat"
US embassy spokesman
Besides refusing Modi a diplomatic visa, the US embassy revoked a valid tourist and business visa under the provisions of the US immigration and nationality act, an embassy statement said on Friday.
"This act makes any foreign government official who was responsible for, or directly carried out, at any time ... severe violations of religious freedom, ineligible for a visa," it said.
"Mr Modi as chief minister was responsible for the performance of state institutions at the time in Gujarat," embassy spokesman David Kennedy said on Friday.
Indian Foreign Secretary Shyam Saran had summoned Robert Blake, the deputy chief of the US embassy, on Friday to issue a strong protest against the decision, the prime minister added.
Deputy US State Department spokesman Adam Ereli said in Washington that the decision to refuse Modi a visa was based on India's findings that his administration had failed to control rights violations.
"It was the Indians who investigated the riots, and it was the Indian government who determined that state institutions failed to act in a way that would prevent violence, that would prevent religious persecution," he said.
The Council on American-Islamic Relations (Cair), the largest US Muslim civil liberties group, applauded Washington's decision.
Hardline Hindu groups aligned to Modi's Hindu nationalist Bharatiya Janata Party (BJP) planned a series of protests across Gujarat over the weekend.
Modi has been accused of doing
little to stop riots in Gujarat
"We will be organising these demonstrations simultaneously," said Ranchod Bharwad, a Hindu activist.
The protests are against US President George Bush "and the insult he has meted out to the Indian constitution by cancelling the visa of Narendra Modi who is a protector of Hindu nationalism," Bharwad said.
Modi's supporters would burn an effigy of Bush and protest at the American Centre in Ahmedabad, he said.
A number of protests were also planned for Sunday.