Authorities in the Indian capital have banned sale of Maggi noodles for 15 days after high levels of lead were found in batches tested in Delhi and Uttar Pradesh.
The government has also ordered a country-wide testing of samples amid a growing food-safety scare.
Several major grocery chains have already taken India’s favourite noodles off shelves.
Nestle India has denied that their noodles are unsafe or unhealthy.
Maggi a big seller for Nestle in India, with annual sales of about 15bn rupees ($235m; £149m).
It is hugely popular with school and college students, and Nestle’s “two-minute” advertising campaign stressing the ease of cooking the instant noodles have made it a household name in India.
Some of India’s biggest Bollywood stars, including Amitabh Bachchan, Madhuri Dixit and Preity Zinta, have appeared in Maggi advertisements.
But Maggi noodles has been at the centre of a controversy since laboratory tests on two dozen packets in Uttar Pradesh last month found lead nearly seven times the permissible limits and excess levels of MSG.
On Wednesday, the company’s shares dropped more than 10% in early trading on the Bombay Stock Exchange after the Delhi government said its food inspectors had found high levels of lead in 10 of the 13 packets they picked up for tests.
“Tests in Delhi showed that 10 out of 13 samples contained lead beyond the permissible limits. Once we have all the results, Nestle India will be given an opportunity to explain,” news agency AFP quoted Food and Consumer Affairs Ministry official G Gurucharan as saying.
“Samples have been tested from all across the country, we are getting the results one by one,” he added.
The authorities said five samples were also found to contain Monosodium Glutamate (MSG), commonly used as a flavour enhancer for Chinese food, canned vegetables, soups and meat.
Experts say too much MSG can cause headaches, chest pain and nausea. Consumed over a long period of time, it can damage the nervous system.
Meanwhile, authorities in the southern state of Kerala have stopped sale of Maggi noodles from more than 1,000 government-run shops following the developments in Uttar Pradesh.
Food and Civil Supplies Minister Anoop Jacob’s office said the sale of the brand had been stopped temporarily until “the dispute is resolved”, the Press Trust of India reported.
A number of other states – Goa, Haryana, Gujarat, Karnataka and Tamil Nadu – have also ordered tests on Maggi noodles, reports say.
Nestle India, a subsidiary of Swiss-based Nestle SA, maintains it has strict safety and quality controls in place.
In a recent statement, it said it had had samples of its noodles tested in an internal and an external laboratory which had found the product “safe to eat”.
The company also said that it did not “add MSG to Maggi Noodles, and glutamate, if present, may come from naturally occurring sources”.
“We are surprised with the content supposedly found in the sample as we monitor the lead content regularly as a part of the regulatory requirements,” it added.