However, the FAA said "the United States will continue to work with India's Directorate General for Civil Aviation (DGCA) to identify the remaining steps necessary to regain Category 1 status for India."
It also said India has made "significant progress towards addressing issues" identified during two safety audits it had carried out in September and December last year.
The American aviation regulator, part of the Department of Transportation, said it carried out "reassessment" of the DGCA, following which "India has been assigned a Category 2 rating under its International Aviation Safety Assessment (IASA) program."
Observing that India had achieved a Category 1 rating, signifying compliance with ICAO standards, in August 1997, it said a December 2012 ICAO audit identified deficiencies in the ICAO-set global standards for oversight of aviation safety by the DGCA.