The measure is one of several responses by the Indian government to the growing problem of rape attacks on women in the country.
Pressing the panic button will alert "police & designated friends/relatives, for immediate response in case of distress or security related issues," said Minister of Communications, Ravi Shankar Prasad, in a tweet late Tuesday.
Under the new rules that come into effect in January 2017, all feature phones will need to have a panic button configured to the numeric key 5 or 9 and all smartphones will have the panic button linked to three short presses of the on-off button, according to the country's Department of Communications.
From January 2018, mobile phones will also be required to have in-built GPS systems to help pinpoint the location of the affected person in the event of harassment or distress, Prasad said.
The buttons on the phones will likely be a deterrent to potential criminals, according to Minister of Women and Child Development, Maneka Sanjay Gandhi. The challenge for the government is to get current users to also get the facility by next year without buying new phones, she said in a statement.
Gandhi said she would work with handset vendors so that software patches would be available for download for older phones, including at some of the vendors' stores, so that the buttons of the phones can be configured to send out emergency calls.
The new Panic Button and Global Positioning System in Mobile Phone Handsets Rules 2016 have been welcomed by a vendors' association, the Indian Cellular Association. The panic button can be easily deployed on phones with a software patch, said Pankaj Mohindroo, president of the association.
The ICA is, however, critical of the use of GPS as it would change the architecture and push up the cost of feature phones, which vendors have been trying to offer at very low prices in India, Mohindroo said.