The Indian Consulate located near the cafe was immediately evacuated along with many other buildings in the Australian city as a preventive step.
Government said all Indian staffers at the consulate are safe. The consulate is around 300-400 metres away from the Lindt cafe where an undisclosed number of people are being held hostage by the armed man.
The Infosys, in a statement, said one of its employees in Sydney was among the hostages and that the employee's family has been informed about it.
As the hostage crisis unfolded, External Affairs Minister Sushma Swaraj spoke to Indian High Commissioner in Canberra.
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"As a preventive measure in accordance with the local requirements, we have evacuated the staff from the Sydney Consulate building because it is located about 300-400 metres away from where this incident took place," External Affairs Ministry spokesperson Syed Akbaruddin said.
In Sydney, Consul General Sunjay Sudhir told PTI that due to security concerns the consulate has been locked down and all officers were told to go to safe places.
In its statement, Infosys said, "We are also in the process of confirming the whereabouts of all our other employees in the city. We are in constant touch with the local authorities and Indian Consulate in Sydney for updates on the situation on ground.