According to the Omani Ministry for Culture and National Heritage on Wednesday, water leaked into the Magan and caused it to capsize.
A support ship from the Omani Royal Navy was accompanying the boat and rescued all eight sailors aboard.
Shipwrights are now attempting to repair Magan, which has been fitted with safety equipment and radar, in an attempt to allow it to continue its voyage.
Ancient trade route
Sailors from Oman, India, Australia, Italy and France were hoping to rely on stars, waves and the colour of the sky and sea to find their way to Mandvi in the western Indian state of Gujarat during a trip lasting up to a fortnight.
Named after a 5000-year-old civilisation believed to have emerged in what is now Oman, the Magan sailed from Sur, 300km south of Muscat, to cross the Arabian Sea to India.
It is carrying a cargo of fish, pottery filled with Omani honey, incense, copper and other traditional foodstuffs and wares.
"Magan boats are more than 5000 years old," said Culture and National Heritage Minister Haytham bin Tariq al-Said.
He said studies had been conducted on remnants of such boats found in Omani archeological sites to retrace their trade routes.