India is reopening its borders to international visitors in a bid to revive economic growth even as the South Asian nation faces the world's second-worst coronavirus outbreak.

Prime Minister Narendra Modi is using a dip in new Covid-19 infections to prise open the economy from its strict lockdown, welcoming foreigners on business trips, but not tourists.

While regular scheduled commercial flights remain off limits for the time being, overseas travellers can use other options, including flights under a government repatriation programme, so-called air-bubble agreements, and private charters, the Ministry of Home Affairs said in a statement yesterday.

Ships will also be permitted.

All travellers must "strictly adhere" to the guidelines on quarantine and other rules.

The surprise decision comes after the number of daily infections in India dropped to around 55,000 versus almost 100,000 last month.

A government panel of scientists said this week the nation may have seen a peak in new infections and could contain the outbreak by February.

But critics have attributed that decline to lower rates of testing as the disease spreads to the country's vast hinterland.

All existing visas - except electronic visas, tourist visas and medical visas - will be restored immediately, the government said.

People holding expired visas can apply again and foreigners wishing to visit for business, conferences, work, study, research or medical reasons will be allowed to apply, the government said.

India has extended a government repatriation programme to allow private carriers including InterGlobe Aviation's IndiGo and SpiceJet to operate such flights with special permission.

The nation has also struck air-bubble agreements with 18 countries, including the United States, Britain, Germany, Afghanistan and Canada.

India's lockdown at the end of March was the world's largest and one of its most severe, causing the economy to contract about 24 percent in the June quarter from a year ago as businesses and jobs were demolished.

Once restrictions were eased, the authorities struggled to get the pandemic under control with the number of infections now second only to the US.

India has also been allowing local airlines to fly a limited schedule since May. But most carriers failed to fill even 70 percent of their seats last month as passengers remain wary about catching the deadly virus.