The mustard variety has been developed by a group of New Delhi scientists over the past decade, and Environment Minister Anil Madhav Dave said India would also come up with other GM food as its population increases and arable land shrinks.
"You'll get to know about our view on GM mustard very soon," Dave, whose ministry decides on GM crops, told Reuters on Friday.
"Naturally if Indian scientists do some research for India, that is an advantage. India's money is staying within India."
Allowing GM mustard is seen as critical to Prime Minister Narendra Modi's goal of attaining self-sufficiency in edible oils.
India spends around $12 billion (9 billion pounds) annually on vegetable oil imports. GM mustard - with yields up to 30 percent higher than normal varieties, also loosely called rapeseed - will give Modi a chance to slash this bill.
But the path to a commercial launch is not without hurdles.
Public opposition to lab-altered food remains fierce, including from groups close to Modi's ruling Bharatiya Janata Party (BJP) who object to reliance on technology developed mainly by Western countries.
This could throw a spanner in the works for GM mustard, which recently got technical approval from a panel of government and independent experts after multiple reviews of crop trial data.
In 2010, India placed a moratorium on GM eggplant and that too after an expert panel had given its clearance, effectively bringing the regulatory system to a deadlock.
But Modi, who was instrumental in making the western state of Gujarat India's leading user of GM cotton while chief minister there, cleared several field trials for GM crops soon after taking office in New Delhi in 2014.
"You must have different parameters for what you eat and what you only come in contact with, like cotton," Dave said. "(But) eventually it is the doctor who gives the medicine. Ideology has no connection with this."
Dave, a river conservationist and amateur pilot, said the government's aim was to make regulation on GM crops foolproof and that people's views would be taken into consideration before finalising anything.
The Modi government is at loggerheads with Monsanto over how much the world's biggest seed company can charge for the GM cotton seeds it supplies, after some farmer groups complained about high rates.
India has also proposed that Monsanto, which dominates India's GM cotton seed market, share its technology with local firms.
Major international seed companies in India are now rallying together as a flurry of regulatory steps in recent months stands to hurt their business.
Monsanto has said it is contemplating leaving India, its biggest market outside the Americas, and recently pulled an application to sell next-generation cotton seeds.
Dave brushed aside concerns that Monsanto's withdrawal of the cotton variety will hurt Indian farmers as existing seeds become vulnerable to pests.
"Indian scientists are capable enough to meet the requirement of Indian farmers, in every crop," Dave said.
(Reporting by Krishna N. Das and Mayank Bhardwaj; Editing by Himani Sarkar and Dale Hudson)
By Krishna N. Das and Mayank Bhardwaj