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"The negatives of films have not arrived yet and the release of the film will be delayed," said Sanjay Bhutani, business head of BR Films, which is distributing the film in India.
The film will be released on March 2 or March 9, instead of its earlier release date February 23.
The Oscars will be given away on February 25 and if Water does bag the Best Foreign Language Film award, it will no doubt help its box-office prospects in India."The nomination to Oscars has already helped us in the marketing of the film," said Bhutani.
"I am sitting with my team to chalk up a strategy on releasing Water across India. Obviously, the film will not have a release like Dhoom: 2 -- or for that matter Baabul too -- because it is a different kind of film. I will however want maximum number of people in India to watch this film because of its great content," added Bhutani.
BR Films acquired Water's distribution rights in India long before it was nominated as Canada's official entry for the Oscars.
The film, set in the 1930s, highlights the plight of widows in Varansi then. Starring John Abraham, Lisa Ray and Seema Biswas, the film has been in the making for the last seven years.
It ran into controversy after rightwing Hindu parties objected to Mehta shooting the film in Varanasi.
Mehta's earlier film Fire too had run into controversy, because it touched upon lesbianism.
The Uttar Pradesh government banned the shooting of Water in Varanasi in January 2000.
"If this film is not allowed to be shot it will be the end of democracy in India," Mehta told rediff.com then. "It will show that the (UP) state government is being totally run by thugs,"
Deepa finally shot the film in Colombo, Sri Lanka, quietly. She also replaced Shabana Azmi with Seema Biswas and Nandita Das with Lisa Ray.
Do the distributors of Water fear controversy erupting again?
"How can I predict people's behaviour?" said Bhutani. "Whatever happened was in past. No point in going back."