The IOC's executive board, meeting in Lausanne, Switzerland, said on its website it "decided to suspend the Indian Olympic Association due to its failure to comply with the Olympic Charter and its statutes, failure to inform the IOC in a timely matter, and as a protective measure against government interference in the IOA's election process."
The announcement said as a result of the decision, India will no longer be "entitled to exercise any activity or right, including financial support, conferred upon it by the Olympic Charter or the IOC until the suspension is lifted by the IOC Executive Board."
The decision came as the Indian association was preparing to hold elections.
The Times of India reported the IOC through recent letters has been warning about actions against India for following the Indian government's sports code in the elections, which the international body insists is against the Olympic Charter.
In an editorial, The Hindu said the suspension was not entirely unexpected.
"That both sides adopted uncompromising postures while handling a most sensitive matter was unfortunate," it said. "The IOC did not wait for the Indian Olympics Association elections to take place on Wednesday before suspending India, nor did it give a hearing to the Indian body, especially at a time when its representative in the country, Randhir Singh, happened to be an aspiring candidate in the elections.
"On its part, the IOA did not show the urgency or diplomacy that was warranted to deal with the situation. The IOA allowed things to drift even though contentious issues related to government guidelines on tenure of office-bearers ... had been brewing for more than two years."
The Times of India reported the suspension also means Indian officials will not be invited by the IOC to attend events such as the Olympics and Paralympics and Indian athletes will not be allowed to compete under the Indian flag but could be permitted to compete under the IOC flag.