The all-electric Formula E World Championship said on Friday it had cancelled a race in Hyderabad due to breach of contract by local authorities.
The series said in a statement the Municipal Administration and Urban Development Department (MAUD), controlled by the Telangana government, had decided "not to fulfil the host city agreement".
"Formula E Operations (FEO) has been left with no choice other than to formally give notice to MAUD that it is in breach of contract," it said.
"FEO is considering its position and what steps it may take under the Host City Agreement and applicable laws. All of FEO’s rights in that regard are reserved."
MAUD did not respond to a Reuters request for comment on Saturday.
The February 10 race would have been the fourth round of the season and the only official FIA World Championship event in India this year.
The season starts in Mexico City next week, and India's Mahindra are one of the teams competing.
"It is deeply frustrating that we cannot build on the success of the inaugural race last year, which delivered almost $84m. in positive economic impact to the region," said Formula E CEO Jeff Dodds.
"Racing in Hyderabad was important to showcase the benefits of adopting electric vehicles in a market where pollution from vehicle engines has a massive impact on public health and the environment."
