Jagjeet Singh, who was a clerk at the Hatch Food and Gas convenience store in California's Modesto city, had come to the US only 18 months ago from Punjab.
Singh was stabbed to death last week after he apparently refused to sell cigarettes to his attacker as he did not have proper ID.
Heather Graves, a Modesto Police Department spokeswoman, told NBC News that Singh and one of the suspects had had a confrontation inside the store.
"We have a couple of different witnesses giving some information but that's still under investigation," she said.
"We just know that there were words exchanged between the two of them."
Asked whether the stabbing may have been a hate crime, Graves said, "That is a possibility and we are investigating that possibility as well.
" Police have released a surveillance picture of the man who got into an argument with Singh over the sale of cigarettes.
The preliminary findings suggest that Singh was securing the business after closing when he was approached by the suspect.
The suspect, described as a Hispanic male stabbed Singh and then fled from the scene, according to a statement from the Modesto Police Department.
Singh was the fourth Indian-origin victim of an alleged hate crime in the US in the last one week alone.
Ramesh Kumar, 32, was found dead of gunshot wounds in the passenger seat of a car parked in a rest area 90 miles out of Detroit.
Indian-origin Naren Prabhu, a Silicon Valley technology executive and his wife, were shot at their home in San Jose by their daughter's ex-boyfriend who was eventually shot dead in a standoff with the police.
Mirza Tatlic, 24, fatally shot the couple in an apparent revenge attack.