Although Gandhi had been widely expected to be named the prime ministerial nominee, a spokesman for the party, which leads the current ruling coalition, quoted party President Sonia Gandhi, Rahul's mother, as saying it was not a party tradition to do so ahead of the general elections, which must be held before May.
Various polls show the country's oldest political party, credited with winning India's freedom from British rule, struggling to make a big impact in the upcoming elections because of an economy burdened by slowing growth and inflation. The party also has been battling corruption scandals and charges of poor governance.
Rahul Gandhi, as an officially declared prime ministerial nominee, also would have to challenge Narendra Modi, a powerful orator and the official candidate of the main opposition Bharatiya Janata Party.
The Times of India quoted the Congress Party's working committee as saying Rahul will lead the party campaign in the elections and that he is the natural leader of the party after Sonia Gandhi.
Rahul Gandhi is the great-grandson of Jawaharlal Nehru, grandson of Indira Gandhi (no relation to Mohandas Gandhi) and son of Rajiv Gandhi, all of whom had been prime ministers. Rahul Gandhi currently is the party's vice president.
The Times said while the party withheld officially naming Rahul as its favorite for the prime minister's job, there remained little doubt as to who would get the top post if the party were to score an upset win and be returned to power after the elections.
"If the election campaign is under his leadership, then in a way, the future leadership is also in his hands," party General Secretary Janardhan Dwivedi was quoted as telling a media briefing, adding the leadership issue is already a settled one.
CNN-IBN television channel reported the Congress Party did not want to pitch Rahul directly against the opposition BJP's Narendra Modi.
Senior BJP leader Arun Jaitley told the channel, "It is a recognition of reality since they [the Congress Party] know they are not going to form the government, why the need for announcing one."