"We do not endorse any political views and do not support any specific ideology. Our goal as a team is only to stimulate valuable dialogue on India's growth story," the Forum said in a statement on Sunday.
Modi was invited to deliver the keynote address at the Forum to be held in Philadelphia on March 22-23 via videoconference.
"As it stands currently, Mr Modi's keynote address at Wharton India Economic Forum has been cancelled," the statement said.
The Forum is an annual student-run India-centric conference hosted by the Wharton School of the University of Pennsylvania.
A group of Wharton's professors and students had written a strongly-worded letter saying they are outraged to learn that the Forum has invited Modi as a keynote speaker.
The letter noted, "This is the same politician who was refused a diplomatic visa by the United States State Department on March 18, 2005 on the ground that he, as Chief Minister, did nothing to prevent a series of orchestrated riots that targeted Muslims in Gujarat."
Planning Commission Deputy Chairman Montek Singh Ahluwalia is expected address the Forum on March 23.
In its statement, the Forum said the student body was extremely impressed with Modi's credentials, governance ideologies, and leadership, which was the primary reason for his invitation.
"However, as a responsible student body within the University of Pennsylvania, we must consider the impact on multiple stakeholders in our ecosystem. Our team felt that the potential polarising reactions from sub-segments of the alumni base, student body, and our supporters, might put Mr Modi in a compromising position, which we would like to avoid at all costs, especially in the spirit of our conference's purpose,' it said.
The Forum said even as it stood by its decision to invite Modi, "We believe that this course of action (of cancelling his address) would be the most appropriate in the light of reactions of the multiple stakeholders involved."
"Therefore, we as a team, would like to apologise for being a catalyst may have put Mr Modi and the Wharton School administration in a difficult position," the Forum said.
The Forum said it hoped to have Modi speak at a "more appropriate forum where he can interact with students without the distraction of this kind of attention".
The Forum said it was in the last stages of finalising an additional keynote address that will be delivered by a very prominent Indian leader and it will be announced very soon.
Since its inception in 1996, the meet has emerged as one of the largest and most prestigious India-focused business conferences that provides a platform for leaders to discuss the opportunities present in India and the challenges that need to be addressed.
Among other eminent invited guests to the conference include Milind Deora, the Union Minister of State for IT and Communications; Gautam Adani, chairman of the Adani Group; actress Shabana Azmi, poet and scriptwriter Javed Akhtar.
Earlier keynote speakers have included former president Dr APJ Abdul Kalam, Union Finance Minister P Chidambaram, BJP leader Varun Gandhi and industrialist Anil Ambani.
Washington: Gujarat Chief Minister Narendra Modi's keynote address at the prestigious Wharton India Economic Forum later this month was cancelled on Sunday under pressure from multiple stakeholders.
First Published: Sunday, March 03, 2013, 23:49