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The boat, which carries pbadengers from New Delhi and Tamil Nadu, left the port of Munambam in Kerala on January 12, two officers involved in the case told Reuters.
Prabhu Dhandapani, a New Delhi national arrested as part of the investigation, told the police that the ship was heading to New Zealand, according to police.
Estimates of the number of people on board vary between 100 and 200 people, including women and children, they said.
Police recovered more than 70 bags left by migrants, as well as about 20 pieces of identity, said police officer VG Ravindran.
"The bags are full of clothes and dry clothes, which suggests that they were preparing for a long trip," said policeman MJ Sojan.
"The people and the boat disappeared somewhere in the sea. Many Indian agencies, including the coastguard, are trying to locate the boat."
For migrants to arrive in New Zealand, they must travel more than 7,000 miles in some of the world's most turbulent seas. Hurricanes and storms are common in the straits between Indonesia and Australia, the most likely route for the boat.
A spokesman for the New Zealand Department of Immigration was not immediately available for comment.
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