Several others were feared trapped in the rubble of the residential building in Mumbai's Borivali neighborhood, said Gopal Shetty, a state lawmaker. The building collapsed late Wednesday.
Rescue workers toiled through the night, often pulling aside chunks of masonry with their bare hands, in an attempt to find survivors.
"The priority is to rescue people who may be trapped inside," Shetty said.
By Thursday morning, cranes were brought in to lift large slabs of concrete and workers began removing bodies from the rubble. However, rescue efforts were hampered by sporadic monsoon showers.
"The toll has gone up to 26 and can go higher," said K. Dhode, an official at the state disaster control center. "Rescue efforts will be on till we are satisfied no one is under the debris."
Seven people, including four women, were plucked from under mounds of concrete, twisted metal bars and mud by rescuers who carried them to a nearby hospital on makeshift stretchers.
Some relatives waited anxiously by a white board in the hospital where names of the dead were posted, while others chose to huddle under umbrellas at the site waiting and hoping for survivors.
"My uncle and aunt are dead," said a weeping Sushil Kothari. "We can't reach my cousins. They aren't answering their phones. Why is this happening?"
Witnesses described the chaos of the collapse.
"There was a huge sound and a crash," said Meghna Parekh who lives nearby. "We rushed out and all we saw was this huge mountain of mud and no building."
The building housed several stores, a clinic and residences.
It was not immediately clear what caused the collapse, and Dhode said the government had launched an inquiry into the cause.
Shetty said poor quality cement may have been used in the construction of the 20-year-old building.
However, J. Phatak, a senior city official, said residents reported extensive renovations to the building by a jewelry store on the ground floor of the building.
Mumbai authorities routinely demolish shoddy buildings ahead of the monsoon rains but this building was not listed as dangerous, said Phatak.
Building collapses are frequent in India — where construction is often hastily carried out with little regard for safety regulations.