By Jyotsna Singh
BBC News, Delhi
The controversial condom has caused outrage in the state of Madhya Pradesh, because a government-owned company is involved in marketing it.
The pack of three condoms, branded as Crezendo, contains a battery-operated ring-like device.
Critics say it is in fact a vibrator, and should therefore be banned.
Sex toys and pornography are illegal in India.
The condom was given a low-key launch across the country three months ago. At that time many critics failed to notice that it had government backing.
A promotional message from the company, Hindustan Latex Limited, describes Crezendo as a product that "provides ultimate pleasure by producing strong vibrations" .
That has caused an outcry among many in conservative India, including the Madhya Pradesh minister for road and energy, Kailash Vijayvargiya, who argues that it is nothing more than a sex toy.
"Sex toys are banned in India and the vibrating device is nothing but a sex toy being sold as condoms.
"The government's job is to promote family planning and population control measures rather than market products for sexual pleasure," he told BBC News.
The Hindustan Latex company says that the new condom was launched to promote the use of condoms in order to prevent the spread of Aids.
"The product was launched with the primary objective of addressing a fall in condom usage... A major reason cited by users was the lack of pleasure when using condoms.
"So we added the vibrating ring as a pleasure enhancer. It helps to hold the condom in position besides producing a vibrating effect," company spokesman S Jayaraj told BBC News.
The company says the condom pack, priced at 125 rupees ($3, £1.50) has been "well received".
It has strongly rejected allegations that its product is a sex toy, but has offered to withdraw the product from Madhya Pradesh if the state government asks for it.
Hindu hardliners have held protests asking the government to ban its sale, though most people on the streets of the state refused to be drawn on the matter.
But those who were willing to discuss such a sensitive issue seemed broadly supportive.
"It is wrong to protest against the move. It is a matter of personal choice," Kunal Singh, a resident in the Madhya Pradesh capital, Bhopal, said.
Medical store owner Ravi Bhannani said: "Customers want something new and this pack offers something new."