A government panel had last year supported introduction of genetically modified brinjal, or eggplant.
Advocates of GM crops argue such varieties can easily increase food supply for India's 1.2 billion people and protect farmers as GM crops can withstand adverse weather and increase output significantly.
But opponents say GM seeds such as the "Bt Brinjal" can be a hazard for the environment and public health, and must be tested thoroughly before they are commercially used.
Ramesh said several European countries had banned such food while China, which was encouraging research in the technology, was "extremely cautious" in using it for food crops.
"True, Bt-corn and Bt-soya is widely available in the US but that is no great compulsion for us to follow suit," Ramesh said.
The government decision is expected to boost the popularity of India's oldest Congress party among farmers, its largest vote base, who mostly are fearful of GM use.
The decision also underlines differences between partners of the ruling coalition headed by Congress.
Sharad Pawar, the food minister and leader of the Nationalist Congress Party, had supported the introduction of the "BT Brinjal".
Amulya Ganguli, a political commentator, said "the Congress has taken one step back in the hope of taking two steps forward later.
"The government has been sensitive to public opinion and they have defused an upsurge among its farmer voters by this decision. It has more to do with politics, not any scientific reason."
India allowed the use of genetically modified seeds for cotton in 2002, and crop productivity has increased sharply as it is now grown in 80 per cent of India's cotton area.