The flag, which can be seen in Lahore, was erected at the Attari border and is 110 metres high.
This has prompted Islamabad to accuse New Dehli of violating international treaties.
Pakistan lodged a complaint to the Border Security Force and has raised suspicions that hidden cameras may be installed on the flag pole for spying purposes.
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The country has asked New Delhi to move the flag at a further distance so it is no longer visible from Lahore, according to India Times.
Whereas, Indian authorities maintain the 200-metre distance from the border is far enough that they have not violated any laws.
“It is our national flag and nobody can stop us from hoisting it on our soil," Anil Joshi, a minister in the Punjab government, told India Today.
The flag is 110 metres long, 24 metres wide, weighs 55 tonnes and is expected to become a major tourist attraction at the Attari-Wagah border.
It has overtaken the previous tallest flag, which stood 300 feet high in the city of Ranchi in the state of Jharkland.
New Delhi's original plan was to fly the flag on 26 January but this was delayed due to technical issues.
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