India's Economic Times reported that New Delhi was likely to ban Chinese companies from providing telecommunications gear to any state-run firms.
Additionally, the newspaper said, even private firms could be prohibited from using equipment from the likes of Huawei and ZTE.
The clashes, in Ladakh in Kashmir on Monday, are claimed to have resulted in the deaths of 20 Indian soldiers while 35 Chinese troops are said to have been either killed or else left injured.
Quoting an unnamed official, the ET said the federal telecommunications department would soon cancel a 4G tender floated by the government-owned Bharat Sanchar Nigam and Mahanagar Telephone Nigam and rewrite the terms and conditions for participation in order to keep Chinese companies out.
“The government has taken a decision to cancel the tender which was floated (by BSNL) earlier this year,” the official said. "We will likely also not allow private operators to use Chinese gear in the future and will encourage domestic telecom equipment makers."
The official also said Indian telecommunications gear makers were being disadvantaged by China not allowing imports, while Chinese equipment was subsidised and thus able to be sold much cheaper in the Indian market.
The newspaper said that India telcos were, however, keen on seeing both Huawei and ZTE play a role in the country as they both offered cheaper equipment and attractive financing options.
Were a ban to be placed on the two Chinese companies, India would have to spend from 10% to 15% more to roll out 5G, ET quoted analysts as saying.
iTWire has contacted Huawei for comment.
Washington has campaigned for more than two years to try and push countries it considers allies to avoid using 5G equipment from Huawei in their networks. Thus far, only Australia and Vietnam have said openly that they would follow the American lead.
Japan, South Korea and Poland have indicated that they are likely to toe the US line, but have yet to make public pronouncements about what policy they would follow.
The UK broke ranks with the US in January, saying it would allow Huawei to supply up to a third of equipment for non-core parts of its 5G networks but has more recently twice changed stance, once saying it would remove Huawei gear completely by 2023 and later saying it would block the use of such equipment after 2023.
Since then, India, the UAE and Cambodia have said they would allow Huawei to participate in 5G trials. But New Delhi is now singing a different tune.