A 40-year-old Sikh, was hospitalised after he suffered stab wounds, in an apparent hate crime, in Santa Clara, California.

Police said Iqbal Singh was standing in front of his home on Sunday morning when his neighbour, walked up to him and stabbed him in the neck with a steak knife, apparently believing that the Sikh, who wears a turban and a beard, belonged to the Taliban.

The victim was waiting in the car-parking lot with his two-year-old granddaughter for other family members to come downstairs at the time, so they could attend worship services at the nearby San Jose gurdwara when the suspect approached him and stabbed him, Santa Clara police Sgt Kurt Clarke said. 

Singh was still in the hospital on Tuesday with serious injuries. The girl was unhurt.

The neighbour, 20-year-old Everett Thompson was arrested on suspicion of attempted murder and a hate crime. It is unclear what exactly led police to believe the attack was racially or religiously motivated. He was taken to Santa Clara county jail.

Investigators are trying to determine why Thompson allegedly attacked Singh.

There are indications that Thompson, who may suffer from mental illness, believed Singh was a member of the Taliban, officials said on Tuesday.

But the victim's brother-in-law, Gurmeet Singh, said it wouldn't be surprising if it was religiously or racially motivated.

"We Sikhs are the most targeted for hate crimes," he said.