The sudden rise in the number of private health centres claiming stem cell treatment for a wide range of diseases has put the government in a fix.
The increase in the numbers is reasoned to the absence of a regulatory or monitoring agency, official sources said.
"The efficacy or safety of such a procedure has never been established," said T C Anandkumar, credited with the creation of India's first documented test-tube baby in 1986.
Three years ago Indian Council of Medical Research had announced a policy encouraging stem cell research so that Indian scientists were not left behind in the global race.
Anandkumar added, "But doctors all over the world have started adult stem cell therapies."
The impetus for using stem cells derived from adults came from recent findings that these adult stem cells can be coaxed to become cells of desired tissues like heart or muscle.
But ICMR never expected that stem cells would make an explosive entry into Indian clinical practice even before basic research and animal experiments confirmed their safety.
Last month's newspaper report on a leading heart surgeon from Delhi's All India Institute of Medical Sciences using patients as guinea pigs, raised the issue of medical ethics.
Heart surgeon P Venugopal informed a national daily that he injected stem cells into 35 patients to check if stem cells made recovery faster.
The work reported through a newspaper rather than a professional journal has become an embarrassment to the institute, a senior AIIMS doctor said on condition of anonymity.
Repeated attempts to reach Venugopal for his comments proved futile.
Officials of ICMR, the custodian of medical ethics, say the AIIMS incident came as a surprise. "We are going to ask AIIMS for details," said Vasantha Muthuswami, chief of basic sciences division and deputy chief of ICMR.
"We are flooded with applications from doctors who want to use stem cells but they do not say where they get the stem cells from or how they are going to use them," says Muthuswami. "We have to act soon before things go out of control," she added.
The burgeoning of stem cell clinics is reminiscent of the spurt of in-vitro fertilization (IVF) clinics in the 1990s, says Anandkumar.
Krishnamurthy Kannan a stem cell researcher at Indraprastha University in Delhi added, "Many surgeons who inject the cells do not even know what stem cells look like."