The tricolour flying atop the Indian High Commission in London was pulled down by a group of protesters waving Khalistani flags and chanting pro-Khalistani slogans on Sunday evening.
Scotland Yard, headquarters of Metropolitan Police, said it was "aware" of an incident in the area but is yet to issue an official statement.
India has, meanwhile, registered its strong protest with the British government over the safety of its diplomatic mission and questioned the lack of sufficient security at the premises.
Images of shattered windows and men climbing the India House building were circulating on social media and videos from the scene show an Indian official grabbing the flag from a protester through the first-floor window of the mission, while the protester is seen waving a Khalistan flag hanging off its ledge.
MEA summons UK diplomat
The Ministry of External Affairs (MEA) said the senior-most UK diplomat in New Delhi was summoned late evening on Sunday to convey India's "strong protest" at the actions taken by separatist and extremist elements against the Indian High Commission in London.
"An explanation was demanded for the complete absence of the British security that allowed these elements to enter the High Commission premises. She was reminded in this regard of the basic obligations of the UK Government under the Vienna Convention," the MEA said in a statement.
"India finds unacceptable the indifference of the UK government to the security of Indian diplomatic premises and personnel in the UK. It is expected that the UK Government would take immediate steps to identify, arrest and prosecute each one of those involved in today's incident, and put in place stringent measures to prevent the recurrence of such incidents," it said.
The banned terrorist organisation, Sikhs For Justice, is conducting a so-called "Referendum 2020" amid a crackdown on pro-Khalistan leader Amritpal Singh in Punjab.