It is thought that the government could amend 1955 legislation and grant citizenship to undocumented refugees who are fleeing religious persecution in the neighbouring Muslim states of Pakistan and Bangladesh.
The new legislation has the potential to benefit Hindus and Christians amongst others, according to The Hindu newspaper.
Reports from the country also suggest there will be changes to the Passport Act and Passport Rules.
One official said: "This is an idea floated right after the Modi government came to power, but it was found that many people who fled into India fearing religious persecution do not have valid documents, or have their visas expired.
"Therefore, these people are illegal migrants and ineligible for citizenship.
"Several high-level meetings were held by the Ministry with the Law Minister, the Law Secretary and the Home Secretary to remedy the situation.
"Basically, two changes need to be made to the Passport Act, 1920, and Passport Rules, 1950, to exempt people who fled religious persecution from Pakistan or Bangladesh from being termed illegal migrants and offer them long-term visas while their case for citizenship is being considered."
On Monday, BJP general secretary Ram Madhav said: "No person who came from Bangladesh because of persecution or harassment will have to leave Assam or India.
"The NDA government will soon bring in necessary amendments to the Citizenship Act."
