It goes up for auction on Wednesday night along with other sporting memorabilia, reports the Courier Mail.
The paper quoted Leski Auctions managing director Charles Leski as saying that interest in the bat had been strong from overseas buyers, but he had yet to field an inquiry from an Australian-base collector or museum.
"From our point of view as auctioneers we should not mind where it goes, but as an Australian this strikes me as an important Australian icon in danger of leaving the country," he said.
"I don't mind if a fanatic or museum in India eventually gets it, but I wonder how some of our cricket personalities would explain that. I am surprised in this country of sporting fanatics I would have thought somebody, or some group, would have put their hand up to buy it," he added.
Leski said he had fielded at least five serious inquiries from India, including one from a man interested in buying the bat before auction.
The bat, recently described by experts as an Australian icon, was originally donated by Sir Donald as first prize in a fundraiser for the Sydney Hospital.
It was awarded to the child who sold the most raffle tickets and has been in the same family since.
Leski said he expected the bat to sell for between 90,000 and 120,000 Australian dollars.