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The International Olympic Committee (IOC) warned India Thursday that it would remain suspended from the movement until it agreed to exclude tainted officials from office.
The IOC has been trying to persuade the Indian Olympic Association (IOA) to amend its constitution to prevent officials who face corruption or other criminal charges from standing for election.
Suspension from the IOC means India does not receive funding from it and Indian officials cannot attend Olympic events, while athletes are barred from competing in the Olympics under the national flag.
The IOA, which has been suspended since last December, has so far agreed to bar only those officials who have been convicted.
But following a meeting of its executive board in Buenos Aires on Wednesday, the IOC said it would not endorse fresh elections for the leadership of the IOA until it amended an eligibility clause.
"This clause.... is key to the good governance of the National Olympic Committee and needs to be fully accepted before the suspended IOA can proceed with elections," the IOC said.
"An official notification of the IOC's position will be sent to the IOA," the statement added.
The IOA was suspended after it elected Lalit Bhanot as its secretary-general, even though he faces trial for corruption linked to the chaotic 2010 Commonwealth Games in Delhi.
Bhanot's co-accused Suresh Kalmadi, who headed the IOA for almost two decades, opted out of the election but ensured his protege Abhay Chautala was voted in as president.
Both Kalmadi and Bhanot, who are currently on bail, have denied any wrongdoing.
IOA vice-president Tarlochan Singh said the eligibility clause demanded by the IOC was impossible to implement as it discriminated against people who were innocent until proven guilty in the eyes of the law.
"We all want India back in the Olympics, but how can we go against the law of the land?" Singh told reporters in New Delhi on Thursday. "This is a difficult situation."