Communications Minister Kapil Sibal made the request to officials from Facebook, Google, YouTube and Yahoo in a meeting on Monday.
Mr Sibal showed them doctored photos of PM Manmohan Singh and Congress party president Sonia Gandhi on Facebook.
India has more than 100 million internet users.
India has 28 million Facebook accounts.
The minister is reported to have warned the internet sites of “stern action” against firms that fail to act.
“These websites have been told to be more vigilant… and ensure that such objectionable matter is not used on the internet,” The Hindu newspaper quoted an official of the telecommunications department as saying.
“We have asked them to actively screen and filter all such material before they are uploaded,” he said.
Mr Sibal was quoted as saying that India did not want censorship but self-regulation.
Rajesh Chharia, president of the Internet Service Providers Association of India, told Associated Press that internet companies should be aware of national security issues.
“I am not favouring censorship – self-regulation is the best censorship available to our system [but] we should not do anything which should harm the peace of the country.”