Gandhi, an animal rights activist, had earlier called for an end to cow slaughter and also suggested banning zoos across the country.
"What used to happen is that farmers would force 80 heads of cattle in vehicles suitable to carry eight or nine animals and then take them to animal markets and slaughter them.
"Farmers would also send ailing and unhealthy cattle for slaughter to these markets. The new rule will ensure such things don't happen," the women and child development minister said.
Sources in the environment ministry said it was Gandhi's People for Animals which urged former environment minister Anil Madhav Dave to sign the notification.
Gandhi said strict monitoring would not only ensure that no animals are bought for slaughter through livestock markets, but are sourced directly from farms so that its provenance can be traced and safety ensured.