Speculation that India's tax authorities were unwilling to grant Formula One teams a tax exemption on their equipment, on the basis they do not consider the October 30 race to be of national importance, had thrown the whole event into uncertainty.
McLaren team principal and chairman of the Formula One Teams' Association, Martin Whitmarsh, said at the Italian Grand Prix the matter "was not straightforward", with teams expressing "serious" concerns over the estimated tax bill, believed to be just over £1million.
However, Indian Grand Prix organisers Jaypee Sports International (JPSI) say they are ready to step in and pick up any tax costs incurred by the teams.
JPSI chief executive Sameer Gaur said in a statement: "JPSI has full support from the government, the sports ministry and the customs department for the F1 event scheduled for October this year.
"We have an in-principle approval from the customs department for creating a customs bonded area for F1 equipment that will be temporarily imported to India.
"If required, as per the law of the land, JPSI will pay customs duties and taxes etc for the temporary import of equipment.
"The estimated value of this equipment is about Rs.150 crore (£20million) and the final duty payable on this will be approximately Rs.8 crore (£1million)."