Mohinder Singh, a herbal medicines' seller, was kidnapped from his shop in Tabbai village of Pakistan's Khyber tribal area by unidentified armed men on November 20.
He was beheaded on Tuesday and his body was mutilated before it was packed in a sack and dumped at Zakhakhel Bazaar.
Terming the incident as "barbaric", party's general secretary Manjinder Singh asked authorities in Pakistan to ensure justice to the victim's family.
Expressing concern over the security of Sikhs in the neighbouring nation, he said that the Pakistan government must protect the minorities living in the country.