The move is aimed at aimed at attracting more tourists and raising India's image as a global tourist destination.
It also aims to address security concerns, helping tourists access telecom services to make calls in times of distress, a tourism ministry official said.
"The scheme was recently approved by the home ministry. A few more final clearances are awaited, following which we hope to implement the scheme shortly."
Foreign tourists face problems in procuring SIM cards in India with service providers requiring paperwork and a list of documents, making them dependent on phone booths.
The SIM card, to be handed out along with a welcome kit that includes maps, will be valid for 30 days and have preloaded talk time and data but no international roaming facility.
India's e-tourist visa scheme, available for citizens of 150 countries has been described as a "game-changer" for tourism. Foreign tourist arrivals surged from 6.3 million in 2011 to 8.03 million last year.
The move comes as India's telecom industry is on the verge of a major price war. Reliance Industries has promised free calls and data services until December 31 on its Jio network and begins with rock-bottom tariff plans from January 1.
