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Health Minister Anbumani Ramadoss says he aims to cut the number of smokers and to protect passive smokers from the harmful effects of tobacco.
India has more than 120 million smokers and observers say the ban will need to be strictly enforced. Those flouting it face fines of 200 rupees ($4.50).
Tobacco smoking in India kills 900,000 people a year, a figure expected to rise to a million by 2010.
India's health ministry says hundreds of thousands of people whohave never smoked die each year.
"From 2 October India is going to go smoke-free in all public places," Mr Ramadoss said.
The sale of tobacco products has been banned throughout the Himalayan kingdom of Bhutan.
It is believed to be the first country to have done this.
The move is part of the government's strategy for predominantly Buddhist Bhutan to eventually become a smoke-free nation.
Smoking was only popular with a small percentage of the Bhutanese population, correspondents say. Chewing tobacco was much more common.