At least 43 people have died in a fire at a factory in New Delhi which authorities believe was caused by an electrical short circuit.

Firefighters fought the blaze from 100 meters (yards) away because it broke out in one of the area's many alleyways, tangled in electrical wire and too narrow for vehicles to access, authorities at the scene said.

The fire started at a factory space near Sadar Bazaar, New Delhi's largest wholesale market for household goods.

Many of the victims were some of the 100 factory workers who were asleep in the illegal factory when the blaze began, Yogesh, a police spokesperson said.

The building is reported to have had no safety licence and faulty wiring is believed to have sparked the fire.

The narrow alleyways in the city's old quarter hampered rescue efforts.

Assistant New Delhi police commissioner Anil Kumar Mittal said "the fire appears to have been caused by electric short circuit," adding that authorities were investigating whether the factory was operating legally.

Many of the victims were factory workers who were asleep when the blaze began. Credit: AP

The building's owner, Rihan, who goes by one name, was detained on suspicion of culpable homicide not amounting to murder, Mr Mittal said.

Dr Kishore Singh said rescuers brought victims to his government-run hospital and two others in the city.

Another 16 people were being treated for burns or smoke inhalation and were in stable condition, Singh said.

About 60 people, including casualties, were taken out of the building, according to police spokesman Arun Kumar Mittal.

Outside a mortuary that was guarded by dozens of police officers, some of the workers' relatives said they had received phone calls from the men trapped inside, who begged them to call the fire brigade.

The Press Trust of India news agency quoted Manoj, who uses one name, as saying that his 18-year-old brother Naveen was working in a handbag manufacturing unit in the building.

Police officers cordon off the site. Credit: AP

"I got a call from his friend informing that he has been injured in the incident. I have no clue which hospital he has been taken to," he said.

Resident Mohammed Naushad said he was awoken by people wailing at about 4.30am on Sunday.

He went outside to find smoke and flames shooting out of the building and, inside, he found the fourth floor engulfed in flames.

One floor below, he saw "20 to 25 people lying on the floor".

New Delhi's chief minister, Arvind Kejriwal, was also at the scene of the fire, promising victims' families compensation.

Manoj Tiwari, a Bharatiya Janata Party lawmaker from New Delhi, said most of the casualties occurred on the third floor of the building.

Prime Minister Narendra Modi described the fire as "extremely horrific."

"My thoughts are with those who lost their loved ones. Wishing the injured a quick recovery," Modi tweeted.

Authorities are providing all possible assistance at the site of the tragedy, he said.

Many of those in the factory were migrant workers from the impoverished border state of Bihar in eastern India, relatives said.

They earned as little as 150 rupees (£1.59) per day making handbags, caps and other garments, sleeping at the factory between long shifts.

Fires are common in India, where building laws and safety norms are often flouted by builders and residents.

In 1997, a fire in a movie theater in New Delhi killed 59 people. In February this year, 17 people were killed by a fire in a six-story hotel in the Indian capital that started in an illegal rooftop kitchen.