The Indian High Commission said the initiative would run until June 30 next year, Free Malaysia Today reported.
Previously, Malaysians had to pay RM465 (US$98) to apply for the e-visa.
Applications could be made online through the Indian visa portal and the visa must be used within 120 days of issuance, the commission said.
Like Thailand, Malaysia has been seeking to attract visitors from the world’s most populous country.
Indian passport holders are now eligible for visa-free entry into Malaysia for up to 30 days.