The decision was made at a high-level meeting chaired by IT Minister Ravi Shankar Prasad.
The talks were centred on a threat of phishing attacks from China and the 5G technology.
"Huawei is out of all, no 5G trial will be for Huawei", sources told Sputnik.
Final call, however, will lie with the office of Prime Minister Narendra Modi.
The move comes as mounting India-China border tensions expand into trade. New Delhi has recently launched a review of its trade and economic cooperation with the neighbouring country, searching for alternate trading partners for crucial imports.
In addition, New Delhi banned 59 Chinese mobile apps, including TikTok, WeChat and Weibo, on Monday over activities "prejudicial to sovereignty and integrity of India, defence of India, the security of the state and public order".
Now, India seems to have joined the US-led campaign to ban Huawei from 5G networks over alleged espionage in favour of the Chinese government. The company refutes the claims as unjustified, politically motivated and anti-competitive practices.