Indian airlines have been given permission to separate a number of ancillary services from the base price of an air ticket.
Under the changes, initiated by civil aviation minister Ajit Singh, carriers will now be allowed to charge for items such as checked baggage, airline lounge use, onboard meals and sports equipment carriage.
"The objective of the decision is to facilitate airlines to offer low base fare for price sensitive travellers, while at the same time offer choice to service seekers at a price," the civil aviation ministry said in a statement.
"This will allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of wafer thin margins."
It adds that the directorate general of civil aviation is empowered to monitor the charges for those items levied by carriers.
The move will likely give a boost to low-cost carriers IndiGo and SpiceJet, which were previously unable to gain ancillary revenues like other similar carriers in other regions.
The announcement will also benefit newcomer AirAsia India, which is preparing to launch services in September, as it will also be allowed to charge passengers for ancillary services.