Cricket lords over other sports in India and teams in the IPL, with a $3.5 billion (£2.3 billion) estimated brand value, count Bollywood stars and major conglomerates such as Reliance Industries as investors.
PepsiCo bagged the IPL title sponsorship rights in 2012 for five years (2013-17) for 3.97 billion Indian rupees (£40 million), almost double that DLF, India's biggest listed property developer, paid for the rights from 2008-12.
The Twenty20 league has been dogged by corruption allegations for years and in July a panel set up by India's top court recommended suspending the franchise owners of two teams for two years following an illegal betting and spot-fixing scandal.
Reports said PepsiCo's decision was based on issues that have brought the game into "disrepute".
"BCCI and PepsiCo have had a longstanding cordial relationship and have been in discussions to work out a solution which addresses PepsiCo's concerns. Both parties will share it when ready," the board and the company said in a joint statement.
The statement gave no further details on the specific issues at stake.
Around 90 percent of the advertisement money targeted at sports in India goes to cricket, analysts say, and one of the two teams that the court-appointed panel recommended for suspension is owned by India Cements.
The panel was established by India's Supreme Court after a separate committee had carried out the investigation into the scandal, which broke in 2013.
More than two dozen people, including players, officials and bookmakers, were arrested by Indian police. Many were later charged with various offences.
Three players -- S. Sreesanth, Ajit Chandila and Ankeet Chavan -- were charged with spot-fixing, the term given to incidents in a match that may not affect the final result but can easily attract illegal bets. A typical example in cricket is when a bowler deliberately delivers a wide or a no-ball.
The panel also recommended that Gurunath Meiyappan and Raj Kundra be banned for life from the sport after both were found guilty of betting on matches and passing on information to bookmakers.
Meiyappan is the son-in-law of Narayanswamy Srinivasan, the current chairman of the International Cricket Council and the managing director of India Cements. Kundra is a former co-owner of the other suspended franchise, Rajasthan Royals.
"We are in constant contact with them. We are working out a solution," IPL chairman Rajeev Shukla told reporters on Friday. "We are addressing their concerns and they are addressing our concerns.
"I think talks are going on in a very cordial relationship. They have been our long-standing partners. So I don't think there will be any problem and we will work it out."
(Reporting by Sudipto Ganguly and Nivedita Bhattacharjee; Editing by Clara Ferreira-Marques/Amlan Chakraborty)
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