More than 40 people are feared dead following an outbreak of a fire at a bag factory located in the capital city of India, New Delhi, the BBC has reported.

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The tragedy was confirmed by the local authorities who said that at least 60 people have been rescued.

"Till now we have rescued more than 50 people, most of them were affected due to smoke," Atul Garg, an official with Delhi Fire Services told members of the press as quoted by German broadcaster DW News.

About 100 people were sleeping in the factory when the tragedy struck.

Firefighters were alerted to the fire at around 05:22 local time on Sunday (23:52 GMT Saturday).

It started in the lower storeys before going up.

The Prime Minister of India Narendra Modi conveyed his condolences to the families of the victims of the deadly inferno.

"The fire in Delhi's Anaj Mandi on Rani Jhansi Road is extremely horrific," Modi tweeted as quoted by Aljazeera. 

"My thoughts are with those who lost their loved ones. Wishing the injured a quick recovery. Authorities are providing all possible assistance at the site of the tragedy, " he added.

It was not immediately clear at the time of writing this article what touched off the fire.

An investigation into what triggered it has been ordered.