Often called the "love hormone", oxytocin is released naturally in human bonding activities such as sex, childbirth and breastfeeding.
The government also asked customs officials to step up vigilance against those likely to try and smuggle oxytocin into India, the customs agency said in a notice on its website.
The government has decided to rely on domestic production to satisfy requirements of the hormone, the Central Board of Excise and Customs added, ordering an immediate ban on imports, whether for human or animal use.
The drug's abuse in animals in India shortens their lives and makes them barren sooner, Women and Child Development Minister Maneka Gandhi has said.
India halted retail sales of the prescription-only drug in 2014, but regulators have struggled to curb illegal sales, and the volume of imports is unclear.
Friday's ban follows an order by the drugs regulator last year for state officials to clamp down on factories that produce the hormone in bulk despite not meeting manufacturing standards.
A panel of top drug experts had recommended an import ban in February, the minutes of their meeting, posted on the drug regulator's website, show.
It also recommended that sale be limited to registered government hospitals and clinics, a bar code system used on all forms of the drug to ensure tracking and prevent abuse.
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