A meeting of senior officials from the home, foreign and tourism ministries, as well as intelligence officers, concluded on Monday evening with a consensus in favour of the sweeping visa reform.
"There was a consensus about initiating the process to make India a tourist-friendly country and extending the on-arrival visa facility to around 40 more countries," Planning Minister Rajeev Shukla told the Press Trust of India news agency.
The new countries would include the United States and Britain -- the source of about 25 percent of all tourists last year -- as well as Canada, Brazil, Australia and most western European nations including France and Germany.
Despite its cultural attractions, beaches and mountains, India attracts relatively few foreign holidaymakers -- 6.58 million in 2012, which was about a quarter of Thailand or Malaysia, for example.
In 2009, it tightened restrictions in the wake of revelations that David Headley, a militant of American and Pakistani descent who helped plot the 2008 attacks in Mumbai, had regularly stayed in the country on long-term tourist visas.
India currently issues visas on arrival to visitors from about a dozen foreign nations including Japan, Finland, Singapore, Indonesia, New Zealand and the Philippines among others.
All others must apply several weeks in advance and visit a visa-processing centre in person.
However, perceptions about India being unsafe for women, remains after recent assaults on foreign tourists.