Ravi Dixit, who will turn 23 this week, is part of the home squad for the event taking place in Guwahati and Shillong from February 5 to February 16 and has used social media to offer up an organ for an asking price of 8 lakh rupees due to a lack of sponsors.
His father's employer, the Dhampur Sugar Mill, has provided financial assistance in the past but according to Mr Dixit, the funds were no longer enough to support him.
"I need at least Rs 1 lakh to participate in the South Asian Games but have not been able to find any sponsor," Dixit was quoted as saying by the Hindustan Times newspaper on Tuesday.
"So, I have decided to sell my kidney for Rs 8 lakh so that I can participate in other tournaments as well for the rest of the year."
90 percent of advertising revenue targeted at sports goes to cricket as the country's most popular game, analysts say.
When contacted by Reuters, the governing Squash Rackets Federation of India, did not immediately respond for comment.
Mr Dixit's attempts to sell the kidney, forbidden by law in India, is also a cause of concern for his parents.
"I have spoken to Ravi. He is in Chennai right now but I spoke to him on the phone. His mother and I are imploring him not to take the step," Ravi's father, Ramkailash, told the Times of India newspaper.
"Together, we will figure out a way to deal with this crisis. This way, he will ruin both his life and career.
"I funded my daughter's wedding with Ravi's winnings. Since he has to support the family as well, he cannot use much of what he gets for himself."