New Delhi urged Ottawa to repatriate at least 41 diplomats by 10 October and threatened to revoke the diplomatic immunity of those who remained after the deadline, the Financial Times reported, citing people familiar with the matter.
Arindam Bagchi, the official spokesperson of the Ministry of External Affairs, earlier said there needed to be "parity" between the size of the missions.
"Yes we have informed the Canadian government that there should be parity in strength and rank equivalence in our mutual diplomatic presence. Their numbers here are very much higher than ours in Canada. The details are being worked out but I assume there will be a reduction from the Canadian side," Mr Bagchi said during a press briefing on 21 September.
Canada reportedly has 62 diplomats stationed in India to deal with a bigger consular section that is accessed by the relatives of roughly 1.3 million Canadians with Indian roots.
The diplomatic crisis between India and Canada began in September after prime minister Justin Trudeau accused the Indian government of being involved in the killing of a Canadian national linked to the secessionist Khalistan movement.
India vehemently denied what it called an "absurd" allegation and responded by suspending visa services in all categories for Canadian nationals due to “security threats” to its consulates.
Each country expelled one senior diplomat from the other in a tit-for-tat move.
Indian foreign minister Subrahmanyam Jaishankar said in Washington last week that the alleged assassination was "not consistent with our policy". "We told the Canadians that ‘look, if you have something specific let us know we are open to looking at it'," the minister said.
He claimed separately that there was a "climate of violence" and an "atmosphere of intimidation" against Indian diplomats in Canada, which is also home to 770,000 Sikhs.
Mr Trudeau is yet to publicly share any evidence but has claimed that he shared the "credible allegations" with India "many weeks ago".
"Declaring more Canadian diplomats personae non gratae wouldn’t help the situation and would make reducing the emotions associated with this disagreement more difficult,” Peter Boehm, chair of the Canadian Senate committee on foreign affairs and international trade, told Financial Times.
The US State Department on Monday reiterated that Washington has asked New Delhi to cooperate with Canada's investigation.
"We remain in close coordination with our Canadian colleagues," spokesperson Matthew Miller said.
"We have engaged with the Indian government on a number of occasions to urge them to cooperate with Canada's investigation. The secretary (Antony Blinken) had an opportunity to do that in his meeting with Jaishankar on Friday,” Mr Miller said.