The row comes days after the online retailer apologised for selling doormats featuring the Indian flag.
Gandhi, who campaigned for independence from Britain, is widely revered and known as the Father of the Nation.
The Indian embassy in Washington had been told to tell Amazon US to respect Indian feelings, a foreign ministry spokesman was quoted as saying.
"As a follow up to the matter regarding the sale of doormats with the Indian flag on Amazon, our Ambassador in Washington has been instructed to convey to Amazon that while providing a platform for third party vendors, they should respect Indian sensitivities and sentiments," Vikas Swarup said, NDTV reported.
The Indian government's Secretary of Economic Affairs Shaktikanta Das was among those to express anger on social media, telling Amazon its "indifference to Indian symbols" would be "at your own peril".
He later said that he had been writing as a citizen, was not threatening government action against the company and remained committed to free trade.
The row follows fury over the sale of Indian flag-themed doormats.
Foreign Minister Sushma Swaraj took to Twitter to demand that Amazon "apologise unconditionally" or its officials would not be given visas.
Amazon India vice-president Amit Agarwal wrote to Ms Swaraj saying the doormats had been offered by a third-party seller on its Canadian website and there had been no intent to offend.
Mr Agarwal said in a statement that the firm was "committed to respecting Indian laws and customs".
Desecration of the flag is punishable with fines and imprisonment in India.
Last June Amazon found itself in a similar controversy over sales of doormats illustrating Hindu gods.
Amazon has not commented on the latest controversy over the flip flops but the product had been removed from its US site on Sunday.
Amazon is locked in a fierce battle with Flipkart, India's biggest online retailer, over market share.
Flip flops depicting Mahatma Gandhi have been removed from sale on Amazon after they caused anger in India.