The ruling, which came in to force from January, has drawn flak from Malaysians who have been visiting friends and relatives in India without restrictions in the past.
Malaysian tourists have been enjoying six-month multiple-entry visas, with many making use of the privilege for holidays.
India tightened its rules on long-term tourist visas to prevent its misuse extremist elements.
Almost eight per cent of Malaysia's population comprises ethnic Indians, who are mostly from Tamil Nadu.
Several of them have close ties with India.
India's new high commissioner to Malaysia Vijay Gokhale said he has reflected the "dismay of the ethnic Malaysian Indians to the Indian government.
"I promised to reflect their concerns to New Delhi, which I have," he said.
The ruling also took many unawares.
S Jayalechumi, 70-year-old Malaysian Indian woman, said she had booked herself on budget airline Air Asia to Trichy and Kolkata without knowing about the ruling. She had returned from India recently.
Local tour and travel agents have also been hit by the new ruling. During peak periods, about 600 visa applications are received in Kuala Lumpur daily.
A tourist visa costs around Rs 2,240, while a business visa costs Rs 6,600.
Businessman T Indran, a frequent traveller to Chennai, says India should review the restriction as a large number of Malaysian Indians visit India every time.
"I accompanied my wife to Chennai in February for medical treatment, and I have to apply for a fresh visa again to leave this week because my last visit was still within 60 days," he told a local daily here.
Grandlotus Travel Agencies chairman K Thangavelu, whose company collects visa applications from Malaysians intending to visit India, felt that the ruling was not good for the travel trade or people-to-people ties between India and Malaysia.