It was not clear who was responsible for the coordinated bomb attacks that also wounded 150 people.
But India’s Deputy Prime Minister Lal Krishna Advani said the banned Students Islamic Movement of India (SIMI) could be behind the blasts.
“SIMI has been acting in conjunction with the Lashkar-i-Taiba and whether today’s blast is also the handiwork of the same organizations will depend on the outcome of the investigation going on,” he said.
The Indian government banned SIMI last year after accusing it of fomenting sectarian trouble, and blames the Lashkar for most of the attacks on troops in occupied Kashmir.
The city’s police chief said he believed the blasts had been carried out by a “radical Islamic group”. He said the driver of one of the taxis had been detained.
“This is the group which we have suspected earlier. At this point of time I would be unable to disclose name as it will hamper our investigation,” the official said, without naming the organization.
He said the explosives were similar to those used in earlier blasts in the metropolis. Rajendra Darda, home minister of Maharashtra state, of which Mumbai is the capital, said the explosives had been placed on the rear seats of the two taxis.
The blasts came minutes after archaeologists issued a report that said a grand temple had been found below the surface of the Babri mosque, razed by Hindu zealots in 1992, at Ayodhya, Uttar Pradesh.
That sacrilege sparked communal bloodshed that left thousands dead, and while officials did not immediately link the report to the blasts, sensitive areas in India were put on high alert.
Messages of outrage and condemnation poured in from all parts of the world. US Secretary of State Colin Powell called Indian Foreign Minister Yashwant Sinha on phone from New York’s Long Island, where he is on vacation, to discuss the blasts.
Mr Powell, a senior State Department official said, expressed his “condolences” and conveyed “outrage at these senseless and cowardly terrorist bombings”.
Dazed and bleeding survivors ran for cover after the explosions. Scores of injured were ferried to hospitals which sent out appeals for supplies of blood.
HIGH ALERT: Immediately after the blasts, police sounded a high alert across Maharashtra and stepped up security at temples and mosques.
The first blast was in the car park of the Gateway of India at 1pm (12.30pm PST) and blew out window panes of the upscale Taj Mahal Hotel. A number of cars were destroyed, hurling metal parts of vehicles metres into the air. The Gateway is a huge waterfront archway built by the British to commemorate the visit by King George V and Queen Mary in 1911.
Taxi driver Kanak Raja said chaos followed the explosion.
“Within a few seconds splinters from the taxi were flying about,” he said.
“The roof of the taxi was ripped apart and thrown at least 100 metres near the entrance of the Taj Hotel.”
Bus driver Tanaji Pawar said he saw men and women running.
“It was a scene of complete anarchy and chaos. I knew when I lifted some of the injured that they had no chances of survival. They were dead.” Mangled cars, trails of blood and shattered glass littered the area in front of the Gateway of India.
The second blast was outside one of Mumbai’ most popular temples and demolished two makeshift shops selling fruit juice and shoes. Most deaths were at the bullion market, which is near the temple.
“There were legs and hands lying on top and inside my taxi. I had a miraculous escape,” said taxi driver Lal Sahib Singh, whose clothes were soaked in blood. He had been driving past the bullion market when the bomb there exploded.
“There were hands and legs flying in the air, blood everywhere,” said Anil Punjabi, whose jewellery shop was next to the market. “I saw some bodies were thrown 10 to 15 feet away from the blast site.”
Mumbai’s key 30-share index closed down 2.92 per cent after the blasts, after earlier falling 4.4 per cent on receiving the news.
Monday’s attack was the worst in Mumbai since 1993 when a series of bomb blasts killed at least 260 people.
Indian police have long feared a similar reaction following riots in Gujarat last year in which at least 1,000 people, mostly Muslims, died.
Mumbai has been hit by a series of bomb attacks in recent months. Three people died in December when a bomb exploded on a bus; 12 were killed in March by a bomb on a rush-hour train and in July, two people were killed in yet another attack on a bus. —Reuters/AFP