38-year-old Simon Paramanathan, who was working as a chef in an Italian food company 'Fiano' in the Herat province of Afghanistan, was abducted on October 13 last year by a terrorist outfit identifying itself as 'Mujahideen'.
The abductors had initially demanded a ransom of $150,000 for his release.
Meanwhile, the Afghan authorities have informed the Indian embassy in Kabul that Paramanathan, who hails from Villupuram in Tamil Nadu, has died, sources said on Monday.
His body, however, has not been found, making it difficult to ascertain whether he died a natural death or was killed, the sources said said.
"The exact cause of death can be known only after the body is recovered and a post-mortem done," the sources added.
The Indian embassy in Kabul and the consulate in Herat are in touch with Afghan authorities to seek more details about the incident.
Paramathan was working as a chef with an Italian food company, which serves Italian soldiers in Afghanistan. He had gone to Afghanistan a year ago, the sources said.
Paramanathan and two locals were kidnapped while they were delivering food at the International Security Assistance Force camp at the Bagram air base.
Paramanathan's wife Vasanthi had appealed to the abductors to release him, saying the family would not be able to meet the ransom demand
His brother Subramanyam, who also works in Kabul, said that the Indian Embassy had informed him about Paramanathan's death on Monday morning.
"I was asked to come to the embassy in the morning. I went there thinking I will get the ransom money. But when I went there, they told me that Simon fell ill and died," Subramanyam added.
The Indian embassy officials have also conveyed the information to Paramanathan's wife.
Paramanathan did not have any security unlike other Indian nationals who have gone to Afghanistan through the government, the sources said.
"Since he had gone through a private contract with the Italian firm, his security was the responsibility of the company," the sources added.
In the last three years, Paramanathan is the third Indian to have been abducted in Afghanistan after Border Roads Organisation driver M R Kutty and K Suryanarayanan, who was serving as an engineer employed by a foreign company in Afghanistan. Both of them were killed by their abductors.
Taliban have also carried out attacks on the BRO personnel engaged in construction of a key highway between Delaram and Zaranj.
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