Visitors from 43 countries no longer have to queue up at local consulates, but can instead apply for their visas online and collect them at airports.
The country received 6.58 million tourists in 2012, far fewer than Asian countries like Thailand and Malaysia.
Tourism Minister Mahesh Sharma said the change would be boost to the industry.
The scheme was "a dream come true for the entire tourism industry of India and is bound to positively impact the economy," he said in a statement.
"The government's objective is to boost tourism and this scheme's implementation will send out a clear message that India is serious about making travel to the country easy."
India previously offered visas-on-arrival to visitors from only 12 countries.
Most other foreigners had to wait several weeks before learning whether they would be allowed to enter India after submitting their applications at visa processing centers.
The new visa-on-arrival will be available at nine major airports in India.
Prime Minister Narendra Modi's BJP government has pledged to boost tourism since his party won a landslide election victory earlier this year.