The cough syrup was blamed for the deaths of 70 children in West Africa.
The parliament's health committee said in a report Tuesday that the company's remaining products should be banned in the country.
The World Health Organization said in October that four of the New Delhi-based manufacturer's cold and cough syrups could be linked to injuries. It found unacceptable amounts of diethylene glycol and ethylene glycol.
The committee said that the government should take legal action against the company.
A request for comment was not responded to by the pharma company.
Scrutiny to India's Drugmakers is brought about by the deaths of people in the country.
The tragedy dealt another blow to India's hopes of becoming the "pharmacy of the world" Attempts at reform have been slow.
According to an investment promotion agency estimate, Indian drugs can be 30% cheaper than their Western equivalents. There is no drug testing or manufacturing facility in the country.
The cause of death of these children is still being investigated.
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