Although there is no official announcement yet, the sources told IANS that the British Indian novelist may keep away from the Jan 20-24 event scheduled at the Diggi Palace Hotel.
The sources gave no details but spoke as Rajasthan Chief Minister Ashok Gehlot told Home Minister P. Chidambaram in Delhi that Rushdie's presence could spark off trouble.
Muslim groups have come out against the visit by Rushdie, whose fourth novel, "The Satanic Verses" (1988), led to major protests from Muslims in many countries after a 'fatwa' by Ayatollah Khomeini in 1989.
Organisers of the popular Jaipur Literature Festival admitted that Rushdie "will not attend" the first day of the event.
He was supposed to reach Jaipur Jan 20 and address two literary sessions.
The event's producer Sanjay Roy said in a two-line statement: "Rushdie will not be in India Jan 20 due to a change in his schedule. The festival stands by its invitation to the author."
The organisers were mum over whether he will attend the festival or not.
Nearly 250 authors from the world, including celebrities like Oprah Winfrey, will take part in the festival.
Gehlot told reporters in Delhi: "We don't have any official communication when he is coming... but minorities in the state are protesting against it. I have informed him (Chidambaram) about the situation.
"It is a famous festival. I am sure organisers ... would not want anything to happen that affects the whole festival. I hope we work out something so that things don't turn ugly.
"We can't prevent (Rushdie) from coming to India since he is a PIO (Person of Indian Origin) and PIOs don't need visa," said Gehlot, who also met Law and Minorities Affairs Minister Salman Khurshid.
Many Muslim leaders in Rajasthan have asked the government not to let Rushdie enter India.
After Darul Uloom Deoband -- the country's biggest Islamic seminary -- demanded that the writer be denied entry, some leaders of the Bharatiya Janata Party's (BJP) minority cell in Rajasthan echoed the view.
Darul Uloom vice chancellor Maulana Abul Qasim Nomani, who had urged the Indian government to cancel Rushdie's visa, Tuesday demanded an apology from the writer for hurting Muslim sentiments.
"Rushdie has hurt Muslim sentiments. He should apologise to the entire Muslim ummah (society) for his blasphemous remarks against Islam and the Prophet. Only then we can allow him to travel to India," Nomani told IANS over phone from Deoband in Uttar Pradesh.
The Man Booker prize winning writer had earlier visited India in 2000 for a Commonwealth writers' forum, and in 2007 the Jaipur Literature Festival despite widespread protest.
Through the week, fans and liberals voiced anguish over attempts to bar Rushdie from visiting India.
In a hard-hitting message on Twitter, journalist and commentator Vir Sanghvi said: "Don't take power away from the people and give it to the bullies."
Last year, an invitation to Rushdie for the Harud festival in Kashmir that was later aborted, had triggered similar flak.
Rahul Pandita, the author of "Hello, Bastar", described the tirade against Rushdie as "shame, shame, shame!"
"This is the real face of the Congress party," Pandita said on social media. Foreign correspondent Seema Sirohi felt "the large Indian state was too weak to protect one man".
Source: (IANS) Jaipur/New Delhi