The International Olympic Committee (IOC) has banned the Indian Olympic Association over elections that could result in a tainted official taking over as the only candidate for secretary-general, a source close to the IOC said on Tuesday.
The source said Kuwait, also under investigation over a sports law, had escaped a ban.
The IOC's Executive Board, which is meeting in Lausanne, is expected to officially announce its decisions later on Tuesday.
"We had offered the IOA and IOC to sit and talk on these issues," Jitendra Singh, the country's sports minister, told reporters.
"We've already written to the IOC but didn't get a reply. It's very unfortunate, more so for the sportspersons. That's all I'm concerned about."
The ban means an effective end to funding from the IOC to the national Olympic committee (IOA), no Indian officials attending Olympic meetings and Indian athletes banned from competing at the Olympics under their country's flag.
Lalit Bhanot, who spent 11 months in custody last year following corruption charges that plagued the 2010 Commonwealth Games in Delhi and who is out on bail, was confirmed for the post last week after the rival faction pulled out ahead of Wednesday's election.
'This is wrong'
The IOC has been angered by government interference in the elections and had warned the IOA in a letter of a possible suspension.
"This is wrong and completely unilateral," Abhay Singh Chautala, who is expected to be elected as IOA President on Friday, told reporters.
"We'd go to the IOC again and explain them of the actual situation and the details of the election. This ban was completely thrust on us.
"The IOA acting president had written to the IOC but they didn't reply. I had also written a letter saying we are sending two members to explain the situation and requested for appointment"
President-elect Abhay Singh Chautala
"It's a unilateral decision. The IOA acting president had written to the IOC but they didn't reply. I had also written a letter saying we are sending two members to explain the situation and requested for appointment. Again there was no answer to that."
The IOA has been directed by a Delhi court to hold the elections adhering to the government's sports code, while the IOC wants the governing body to abide by the Olympic charter.
The IOC blamed non-cooperation by the Indian government and the IOA for the current situation.
Acting IOA President VK Malhotra said his organisation was caught in the middle.
"We had gone to the prime minister and asked him not to pass that controversial bill. The bill was not passed but the code was imposed. That's how the problem started," he said.
"Now the IOC is complaining of government interference, while court and government want us to go by the code. We were caught in the crossfire. We will try and find some reconciliation so that our athletes don't suffer.