Around 40 Indians in Mosul have been kidnapped by suspected Sunni Islamist militants who took control of the northern Iraqi city.
The Indians, who were working on construction projects, were abducted as they were being evacuated from the war-ravaged city, the Times of India reported.
Militants from the Islamic State in Iraq and the Levant (Isis) were suspected to be behind the incident, the report said, adding that the Indian government had sent senior officials to Iraq to ensure the release of the hostages.
The raging violence has also trapped more than 40 Indian nurses working at a hospital in Tikrit, a city near Baghdad that fell to Isis militants, reports have said.
The Times of India said New Delhi has sent a former ambassador to Iraq to help locate the abducted Indians and possibly negotiate their release.
Prime Minister Narendra Modi has reviewed the situation and asked officials to spare no effort in resolving the crisis.
Former ambassador Suresh Reddy, who is now a special envoy to Association of Southeast Asian Nations (Asean) is on his way to Mosul, the report said, adding that National Security Advisor AK Doval was monitoring the situation.
India's foreign ministry had earlier said more than 40 workers were missing in Mosul.
"We know 40 Indians are in Mosul, they are uncontactable. Despite our best efforts, we haven't been able to establish contact with them at this stage," ministry spokesperson Syed Akbaruddin said.
Reports say more than 100 workers are trapped in Tikrit, the hometown of former dictator Saddam Hussein, while several Indians have taken refuge in the city of Erbil.
The nurses trapped in Tikrit are believed to be from the southern state of Kerala and have expressed fear for their lives.
"We are literally prisoners within the hospital premises ... We are afraid because we have no security here. All the military, police, everybody escaped from here. Only we are here," Marina Jose, a nurse, told NDTV.
Government sources said the nurses wanted to leave but there was nobody to take them to the nearest airport in Baghdad.
BBC reported the Indian nurses were visited by Red Cross volunteers who promised to evacuate them soon. But the nurses, who say armed militants are roaming around the hospital, are losing hope with each passing day.
"We have been waiting for a vehicle to come and take us from here, but it seems like everyone is giving us empty assurances. We have no hope left anymore," one of the nurses said.
The hospital authorities have told the nurses they were free to leave but that nobody could ensure their safety after they leave the premises.
India has said it has no plans to withdraw diplomats from Iraq, but has issued an advisory for its citizens who want to travel to Iraq.