The government has asked its Olympic association to raise the issue of the London Olympic Games' sponsorship deal with Dow Chemical, the latest sign of pressure on organisers to reconsider involvement of a company linked to the Bhopal gas disaster.
Many victims and activists hold Dow responsible for failing to give enough compensation to victims of a 1984 gas leak which killed thousands and injured hundreds of thousands more in Bhopal.
"We have written a letter to the IOA (Indian Olympic Association), asking them to take up the matter with the organisers of the London Olympics," a spokesman for the sports ministry told Reuters.
The pesticide plant was owned by Union Carbide, which settled its liabilities with the Indian government in 1989 by paying $470 million for Bhopal victims.
Dow bought Union Carbide a decade after the company had settled with the Indian government and now finds itself in the firing line for its sponsorship of a temporary decorative wrap over London's Olympic Stadium.
The sponsorship has caused anger across India, but nowhere more so than the central state of Madhya Pradesh, where Chief Minister Shivraj Singh Chauhan is urging the Indian government to boycott the sporting extravaganza. Bhopal is the provincial capital.
Chauhan says that instead of sponsoring the Games, the company should spend that money on Bhopal survivors.
The Indian government last year demanded more than $1 billion additional compensation for the victims of the gas leak.
Activists say 25,000 people died in the immediate aftermath of the accident and in ensuing years, and about 100,000 people who were exposed to the gas continue to suffer today from ailments that range from cancer, blindness to birth defects.
Every year, victims and their families stage demonstrations and Madhya Pradesh minister Chauhan led protests last week with a letter to Sports Minister Ajay Maken, requesting him to boycott the Games.
"There is no question of boycotting the Games of course," the spokesman added.