A second Australian art gallery has removed from display a centuries-old statue following allegations the artefact was stolen from an ancient site in India and sold by a tainted Indian art dealer.

The decision by the Art Gallery of New South Wales (NSW) follows a similar move by Canberra-based National Gallery of Australia that on Monday, pulled from display the bronze $5.6-million statue, purchased in 2008 from New York art and antiquities dealer Subhash Kapoor.