The move, a relief to art dealers, will free up movement of artefacts in the country. The proposal was made to the government by the Archaeological Survey of India (ASI).
The current draft comes 32 years after the government first began the process of amending the Antiquities and Art Treasures Act, 1972.
The draft Antiquities and Art Treasures Regulation, Export and Import Bill, 2017 says that every licence issued under the 1972 Act will stand repealed once the new bill becomes a law.
"This was seen as a cumbersome process and the Ministry of Culture (under which the ASI functions) has now decided to smooth the movement of such antiquities in the country," said a senior ASI official.
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The draft prohibits the export of antiques, unless it is done by the government or its agencies.
However, it allows trade in such items virtually without any restrictions within the country.
"Carrying on business of selling or offering to sell antiquities and art treasures to be free," the draft says.
Under the 1972 Act, which was notified in 1976, all objects more than 100 years old have to be registered with the ASI, along with a photograph.
If a person does not register or wrongly registers the object, they are liable to be punished. The Act also gives the ASI powers to raid any house if it feels antiques have been stored wrongfully.
The draft has also waived customs duty for anyone who brings back antiques of Indian-origin after lawful purchase and artists who bring back their own creations.
The draft has now been put up for consultation after which it will be finalised and sent to the Cabinet. It will become a law only after Parliament passes it.