The report, released on Wednesday by the Delhi-based centre for science and environment (CSE), also criticised the government for failing to act on the issue.
Tests of 11 soft drinks produced by the two companies found high pesticide residues were present in all 11 products.
Three years ago the group found that 12 of the companies' soft drinks had such high pesticide levels they could lead to cancer.
Sunita Narain of the CSE said: "If soft drinks are the choice of millions, the least that can be done is that these drinks are regulated."
The bureau of Indian standards set acceptable levels of residues for soft drinks in the wake of CSE's 2003 report although these have yet to be put in place.
The residue levels found in fizzy drinks in the most recent tests were as much as 24 to 200 times higher for some deadly pesticides than those the standards agency has suggested are acceptable.
Narain said: "This is a grave public health scandal."
The group called upon consumers to avoid drinking Coke and Pepsi and other soft drink brands produced by the two US firms until they cleaned up the product.
The Indian soft drink manufacturers association, of which Pepsi and Coca-Cola are members, said the soft drinks were safe to consume.
The industry body said in a statement: "The soft drinks manufactured in India comply with stringent international norms and all applicable national regulations."