NEW DELHI—The Indian government is seeking nearly $100 million in damages from Nestlé SA’s local arm, after a food scare involving the company’s popular instant noodles forced a nationwide product recall.

In a complaint filed late Tuesday with the National Consumer Disputes Redressal Commission, India’s Consumer Affairs Ministry alleged Nestlé had engaged in “unfair trade practices” and “misled” millions of consumers to believe its Maggi 2-Minute Noodles were safe to eat, said a senior government official, who asked not to...