Emergency forces rushed to a remote village in Pune district of Maharashtra state, where a hill collapsed sending mud and rocks tumbling onto homes in the morning as residents were reportedly sleeping.
"Ten dead bodies have been recovered so far," said Tripti Parule, a spokeswoman for the National Disaster Management Authority, in an email to AFP.
"Two persons alive have been rescued. According to the district officials 150-200 (are) feared trapped," she said.
Television footage showed a chunk of hillside dramatically giving way and a cascade of mud, rocks and trees, sparking clouds of dust below.
Alok Avasthy, regional commandant at the National Disaster Response Force (NDRF), said the landslide had damaged about 50 houses in Malin village.
Around 300 rescue workers were deployed to the village, but ongoing rains were hampering operations, officials said.
Prime Minister Narendra Modi described the loss of life as "saddening" on Twitter, while footage showed workers carrying a victim on a stretcher towards vehicles, as a crowd watched.
Heavy machinery has been mobilised to try to rescue those feared trapped, while about 30 ambulances rushed to the scene, local government official Saurav Rao told the Press Trust of India news agency.
"Exact number of casualties is not known as we are moving slowly to ensure that those trapped are removed safely," Rao said.
Divisional Commissioner Prabhakar Deshmukh said the rescue operation was a challenge with the area 15-20 kilometres (nine to 12 miles) from the nearest medical facility, and the NDRF had difficulty reaching the scene because of damage caused to the roads.
Heavy rains have been falling in Maharashtra and other parts of India as a result of the annual monsoon.
Rains have triggered small landslides in the Himalayan states of Himachal Pradesh and Uttarakhand in recent days, while authorities are closely watching rising river levels in case of floods.
In Himachal Pradesh's capital of Shimla, rains have uprooted trees, knocked out power and triggered slides, PTI news agency said.
Landslips have blocked roads to popular Hindu pilgrimage sites in Uttarakhand, which was hit by a landslide and flooding disaster last year that is thought to have killed nearly 6,000 pilgrims, tourists and others.
Raging rivers flattened houses and buildings in the state in last year's floods, when the area was packed with travellers in what was a peak tourist season.
Building collapses are a common occurrence in India, especially during the rainy season, with millions living in dilapidated old structures or newly built but illegal constructions made from substandard materials.
An apartment tower under construction came crashing down in the southern city of Chennai late June following heavy rains, killing 61, mostly labourers.
A similar accident on the outskirts of Mumbai last year left 74 dead.
British daily The Guardian last year gathered statistics showing that 2,651 people were killed across India in 2012 from the collapse of 2,737 structures, including houses and bridges.