The High Court in India's southern state of Tamil Nadu on Thursday dismissed a petition looking to put a stop to Coca-Cola and PepsiCo sourcing their water from the Thamirabarani river.

"The court today ordered the two companies will not be banned from using Thamirabarani river water," an official said.

Thursday's order nullifies a previous injunction passed by a court in November. Over the past four months, the water supply to the two beverage companies has been affected.

Petitioners argued that thousands of farmers in Tamil Nadu were suffering from water shortages while Coca-Cola and Pepsi used the river water for their own commercial gains. 

The two companies said they were being singled out and targeted.

Thursday's court order came at a time when soft drinks from the two companies were being pulled from the shelves of thousands of small shops and retail outlets in the state following calls from trade bodies.

The Federation of Tamil Nadu Traders Associations and the Tamil Nadu Traders Associations Forum blame the soft drinks companies for exploiting water resources and thereby affecting farmers.

Traders believe the ban can boost sales of Indian beverages and encourage better sales of fruit juices.

A similar move was attempted in the state in 1998 but failed miserably.

PepsiCo and Coca-Cola enjoy a lion's share in the beverage market in India. So far, the two companies have not responded to the calls for a boycott of their products in Tamil Nadu.

(With inputs from Xinhua)