At least 43 people have died in a factory fire in India's capital New Delhi, with the toll expected to rise, police told AFP.

The blaze broke out in the early hours in the city's old quarter, whose narrow and congested lanes are lined with many small manufacturing and storage units.

"We... have since rescued at least 50 people," Sunil Choudhary, New Delhi's deputy chief fire officer, told AFP.

They were "labourers and factory workers sleeping inside this four-or-five storey building," he said, adding that the fire had been extinguished but rescue operations were ongoing.

A senior Delhi police official said eight or nine people were carried out later, bringing the overall number rescued to at least 58.

Fire officials said it was very difficult to access the dark, poorly lit premises in the commercial hub of Sadar Bazar.

Local news channels aired footage of firemen carrying people out of the narrow lanes to nearby emergency vehicles.

The building was filled with school bags and packing material, fire officials said, but cautioned that they were still unsure about the cause of the blaze.

Monika Bhardwaj, the deputy police commissioner of Delhi's north district told AFP that the death toll from the incident had jumped to "43, with 16 others still admitted at the local hospitals."