This follows a similar move for one emergency '112' number for availing services of police, ambulance and fire department.
"Technology is solely meant to make human life better and what better than using it for the security of women," Communications and IT Minister Ravi Shankar Prasad said in New Delhi on Monday.
"I have taken a decision that from January 1, 2017, no cell phone can be sold without a provision for panic button, and from January 1, 2018, mobile sets should also have Global Positioning System inbuilt," Prasad said.
The notification did not specify which agency would connect the number, but sources in the ministry said the decision will be taken soon.
The Gazette of India notification said from January 1, 2017, no mobile phone handset manufacturing company shall sell in India: "The feature phones without the facility of panic button by pressing 'numeric key - 5' or 'numeric key - 9' to invoke emergency call."
It also said: "Smartphones without the facility of emergency call button by pressing the same for long time to invoke emergency call or the use of existing power on or off button, when short pressed thrice in quick succession."
The notification added: "With effect from January 1, 2018, no mobile phone handset manufacturing company shall sell the new mobile phone handset in India without the facility of identifying the location through satellite-based GPS."
The notification defined a feature phone as one that can access the Internet and play music but lacks provisions of an operating system feature of a personal computer. Smart phone, on the other hand, has all features of a personal computer system.
In March this year, the government had proposed that people will have to just dial "112" for emergency help from police, ambulance or the fire department.
The telecom watchdog had proposed that all existing emergency numbers - such as 100, 101, 102 and 108 - be retained as secondary numbers, which would then be re-routed to the single emergency number 112.