Terrorist gunmen and bombers have mounted a brazen attack on India's financial capital Mumbai, killing at least 82 people, injuring hundreds and taking scores of hostages, including foreign tourists.
A witness videos shooting on the streets of Mumbai as at least 80 die in a terrorist attack. Hostages remain in a luxury hotel.
A group calling itself the Deccan Mujahedeen has claimed responsibility for the attacks that focussed on luxury hotels and public places, including railway stations, in the Colaba district.
The dome of the luxury Taj Hotel was alight this morning. Military stormed the building in a bid to rescue as many as 60 people taken hostage and caught up in the violence.
The Department of Foreign Affairs and Trade has confirmed that at least two Australians have been injured. Reports suggest about 20 Australians are caught up in the violence that was this morning condemned by Treasurer Wayne Swan.
Some of the Australians are part of a trade delegation from the NSW Department of State and Regional Development.
NSW Premier Nathan Rees said contact had so far been made without about half of them. The situation continued to be volatile, he said.
Acting Foreign Minister Simon Crean said there was also a delegation from Melbourne's Monash University in the besieged city.
More than 2000 Australians are registered as travelling in India, 300 of them in Mumbai.
Bombs exploded and gun battles took place between terrorists and police at multiple locations across downtown Mumbai overnight. The targets included the city's best hotels, busy railway stations and cinemas.
Men reportedly armed with AK47s and grenades attacked the famous Taj Hotel and the nearby Oberoi hotel. Multiple bombs exploded in both buildings and a large number of hostages are being held.
The exact number of hostages was not known but one senior official estimated that 50 to 60 people were being detained in the Taj Hotel.
An unnamed British businessman said he was held hostage with about 15 people at the Oberoi by two heavily armed young men dressed in T-shirts and jeans.
The gunmen wanted to detain those with American and British passports, he said.
"They took us up the elevator there was lot of smoke and fire and guns," he told a local TV station. "Me and my friend escaped down the fire exit."
Three foreigners were reportedly being held hostage inside Mumbai's Trident Hotel, including one Belgian and one Indonesian.
A petrol station was blown up, shots were fired outside a hospital and there were reports of a bomb near the airport.
Amid chaotic scenes on Mumbai's streets, terrorists reportedly stole several cars including a police vehicle and drove through the streets firing shots a random.
Three of Mumbai's top policemen were killed in the attacks, including the city's counter terrorism chief, Hemant Karkare.
Four suspects were shot dead by police after a high-speed police chase and about 10 suspects had reportedly been detained.
Navy commandos were reportedly deployed in counter terrorism operations at the Oberoi Hotel. Heavily armed commandos also entered the Taj Hotel.
The Indian Army and Navy are on standby.
A little-known organisation called the Deccan Mujahideen claimed responsibility for the attacks, the Times of India reported. The demands of the terrorists are not yet known.
The JW Marriot Hotel in the Mumbai district of Juhu has also been cordoned off by police.
At least 200 people are reported to have been injured in the multiple attacks.
Mr Crean said the violence had not abated.
"Clearly the attacks are continuing,'' he told a press conference.
He said the devastating impact of the "cowardly, indiscriminate'' attacks showed "how quickly and effectively these people can strike''.
"The is an appalling assault on the people and the stability and the democracy of India'' that had come without warning, he said.
The exact number of Australians caught up in the violence is not known but Mr Crean said those hurt had not suffered life-threatening injuries.
Mumbai-based KPMG accountant Usha Agarwal said the city's main Chhatrapati Shivaji railway station would have been packed with people when gunmen open fired.
She said she believed the first bomb blasts had gone off about 10pm Mumbai time (4am AEDT) when many professional workers would be making their way home from the targeted area in southern Mumbai.
"It is still a very busy time, professionals work quite late, 10pm is not late in Mumbai,'' she said.
Ms Agarwal said she often caught the train from the station about the time of the attacks, which happened about 20 kilometres from her workplace.
She said locals had been on red-alert in the lead up to the attacks and were becoming accustomed to bombings in the busy city.
"The Mumbai people are used to all this because not even a month before there was some bombs in Mumbai and the bombings of cabs and riots,'' she said.
Ms Agarwal, speaking to The Age about 5am Mumbai time, said she would wait to see the morning news before deciding whether she would go to work today.
"It doesn't affect us,'' she said.
"Bomb blasts have happened many times in the past.''
With Reko Rennie and Mex Cooper