The downgrade to the lower of two safety categories means Indian airlines cannot increase the number of flights they operate to the United States or enter into any new code-sharing arrangements with American carriers, said Uday Moray, India's Civil Aviation Ministry spokesman. He said the move would not affect current flights.
The demotion puts India among just a handful of other countries deemed to have substandard air-safety practices, among them Ghana, Indonesia, Nicaragua, Paraguay and Zimbabwe. The US uses the system to goad countries into improving their aviation standards.
India has started training programmes to address the problems and should be in line with the FAA's top-category standards by March, Moray said.
He said the FAA raised 33 issues, including beefing up safety training, offering better safety documentation and hiring full-time flight operations inspectors.
Jitender Bhargava, a civil aviation expert, said the FAA's decision was embarrassing for India but did not mean it was unsafe to fly on Indian carriers.
He said the move would hurt Air India and Jet Airways at a time when foreign carriers are expanding flights to India.
The move will "hit the market share of Indian carriers in our home market", he said.