Login to Office365 Admin Portal

Portal.office365.com – https://admin.microsoft.com/

In Microsoft 365 Admin Center

Go to Setting

Under Service – Go to Office 365 Groups for Manage external sharing

Go to Security & Privacy tab

Click Sharing

In sharing option

Make sure “Let users add new guests to the organization” is selected.

Save Settings.

Note: The settings is similar to the Members can invite settings in User Settings > External Users in Azure Active Directory

Thanks,

Praveen Kumar

Microsoft Certified Trainer – Cloud Services