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PM Modi reportedly told nine Chief Ministers that the lockdown had saved thousands of lives in the past one and a half months.
"We have to give importance to the economy as well as continue the fight against COVID-19," PM Modi told Chief Ministers.
Economic activities are likely to reopen in orange and green districts, which have far fewer cases or none.
States, said the PM, must make efforts to covert red zones into orange and then into green zones.
Private cars may be allowed with restrictions but the ban on public transport, including trains, flights and buses, is likely to continue.
Schools and colleges are likely to stay shut and the ban on religious meetings and congregations will also continue.
Five of nine Chief Ministers at the meeting said the lockdown should end, while the rest were in favour of extending it for the sake of controlling the spread of COVID-19.
Among those who favoured continuing the lockdown were Odisha, Meghalaya and Goa. Odisha asked for a month's extension of the restrictions.
"Green zones will be opened, relaxations in sectors have been agreed to but the mindset of lockdown will continue. We should get people ready with new norms like social distancing," said Meghalaya Chief Minister Conrad Sangma after the meeting.
Kerala Chief Minister Pinarayi Vijayan skipped the meeting and sent the Chief Secretary to represent the state.
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