Of these, eight are operated by IndiGo and three by GoAir.
The decision comes hours after an A320 neo aircraft of IndiGo suffered engine failure mid-air and made an emergency landing at Ahmedabad airport.
Citing safety of aircraft operations, the DGCA said, A320 neos fitted with PW1100 engines beyond ESN 450 have been grounded with immediate effect.
"Both IndiGo and GoAir have been told not to refit these engines, which are spare with them in their inventory," the Directorate General of Civil Aviation (DGCA) said in a release.
The regulator would be in touch with the stakeholders and review the situation in due course and when the issue is addressed by European regulator EASA and P&W, it added.
Earlier in the day, Civil Aviation Secretary R N Choubey had said that an appropriate decision would be taken today.
On February 9, EASA had issued an emergency airworthiness directive for A320 neo planes fitted with PW1100 engines having a particular serial number.
The directive followed instances of the engines shut-down during flights and rejected take-offs involving the A320 neo family aircraft.
On February 13, DGCA had said that it was monitoring engine glitches to ensure that safety is not compromised at any time.
On February 21, P&W said it has come out with a revised configuration to address the latest problem in some of its engines powering A320 neo planes.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)