In a letter from the SAARC Secretariat, based in Nepal, it has been suggested whether the "issue could be referred" to SAARC's Technical Committee on Science and Technology.
India has, however, rejected the suggestion saying the project is India's gift to its South Asian neighbours.
"If the issue is the referred to the SAARC's Technical Committee on Science and Technology then it will get stuck for 2-3 years as everyone will chip in. We wrote back to the SAARC secretariat that it was not possible to bring the project under the aegis of the regional grouping," said a senior government official.
Sources said the fresh demand was made at the behest of Pakistan. In its meeting in June, Pakistan had made a similar demand to bring the project under the SAARC umbrella and had even offered to chip in with funds and technical expertise.
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Moreover, referring it to the SAARC's technical committee on S&T, would only delay the project further, sources said, and India wants to launch the project by December 2016, as envisaged by Prime Minister Narendra Modi.
Sources also pointed out that India is waiting for the other SAARC countries approval so that it can book a slot in the orbit, where the satellite could be placed.
"Once we get approval from all the countries, we can apply for ITU registration, an important step before launching a satellite," a source said.