The man who was due to auction personal effects of Mahatma Gandhi says he has called off the sale, BBC reported.
The planned auction had led to uproar in India, with one minister calling it a "gross commercialisation".
James Otis had planned to auction Gandhi's iconic round glasses, a pocket watch, leather sandals and some other items in New York.
"In the last few hours, I have decided, in the light of the controversy, not to sell Gandhi's personal items," he said.
The Indian government had come under immense pressure to bring back the items.
"Gandhiji himself would not have agreed to these conditions," India's Junior Foreign Minister Anand Sharma said earlier.
"Gandhiji's memory and values should not be violated, the auction should not take place," he said.
Gandhi's spectacles, which he once said gave him "the vision to free India", a pair of his sandals and his pocket watch were among the five items due to be sold. A plate and a bowl used by Gandhi were also among the lots.
"The Zenith watch that will be sold was gifted to him by Indira [Gandhi], who became the prime minister of India later on, and it was very dear to Bapu [Gandhi]," Gandhi's great-grandson Tushar Gandhi, told the BBC.
"The plate and the bowl are the ones from which he took his last meal before he was murdered.
"The sandals he made with his own hands, and he gifted them to a British army officer who had taken photographs during his halt in Aden when he was on his way to London to attend the round table conference [to discuss India's independence]," Mr Gandhi explained.
Mahatma Gandhi is widely revered in India as the leader of the independence movement against British rule.