Activists of the Students for a Free Tibet-India (SFT), a group lobbying against the deletion of the scene from the Hindi film, said Thursday the decision has disheartened many Tibetans and Indian supporters.
"Tibetans living in India and across the world are disheartened that the 'Free Tibet' banner has been deleted from the film, which otherwise could have carried the message through this much awaited film of the year, " Dorjee Tseten, SFT national director, told reporters in Mumbai.
The red and blue flag featuring a rising sun is a symbol of Tibetan resistance to Chinese rule.
"All this is happening at a time when so much brutal oppression is unleashed by China in Tibet, because of which 12 young monks, nuns and young adults have set themselves in a series of self-immolations, " he said.
Releasing Friday, Imtiaz Ali-directed "Rockstar" is the journey of a musician who leaves his happy life to achieve success as a singer. The film ran into controversy after the scene showed the fans waving the flag as Ranbir sings the song "Saada Haq".
The scene was shot in a Tibetan monastery in Dharamsala, the seat of the Tibetan government-in-exile.
A delegation of Tibetans from Dharamsala met Pankaja Thakur, CEO of the Censor Board of Film Certificate, in Mumbai Wednesday on its decision to blur the "Free Tibet" flag.
Tibetan writer and activist Tenzin Tsundue, who also met Thakur, said in Mumbai: "This act of self-censorship in India belies the larger reality of India's support to Tibet and the Indian people's love and support for His Holiness the Dalai Lama. As much as it denies the Tibetan refugee living in India for the past 52 years, it also denies Indian artists their right to freedom of expression."
"Unfortunately this single opportunity to see a 'Free Tibet' banner in a mainstream Hindi film has been banned, " Tseten added.
Angry Tibetan activists have already staged rallies across the country.
The Dalai Lama along with many of his supporters fled Tibet and took refuge in India when Chinese troops moved in and took control of Lhasa in 1959.
He then headed a Tibetan government-in-exile which never won recognition from any country.
India is home to around 100, 000 Tibetans.
Beijing is quite sensitive to issues related to the exiled Tibetans as it believes that the exiles want Tibet to secede from China.