The blasts from two car bombs came without warning and injured more than 150 people, according to Police Joint Commissioner Ahmed Javed.
BD Mahajan, superintendent at JJ Hospital, told French news agency AFP that 26 people were brought in dead and that two more died of their injuries during treatment.
Thirteen were declared dead at Saint George hospital, while three died at GT hospital, officials at the two insititutions said.
The blast in Mumbai, formerly known as Bombay, came minutes after national archaeologists claimed they found the remains of a Hindu temple below the surface of a mosque razed by Hindu zealots in 1992 in northern India.
Some media reports suggest four explosions, but police have confirmed two so far.
Historic monument hit
Amid the confusion and chaos police said they expected the toll to rise.
"Yes, we have reports of two big explosions – like sounds near the Mumba Devi temple in central Bombay and another one at the Gateway of India in south Bombay," Joint Police Commissioner Ahmed Javed told AFP.
"We deplore these attacks and we sympathise with the victims and their families"
Pakistan foreign ministry spokesman
The Gateway is Mumbai's premier historic site and is usually crowded with tourists. Some of the victims were blown off the parapet by the impact.
Police suspect the blasts, from two bombs left on the back seats of parked taxis, were part of a deliberate operation. No one has yet claimed responsibility.
Sniffer dogs were patrolling the financial sector and tourist attractions in case more explosives had been planted in the district.
In the past India has blamed similar atrocities on its neighbour Pakistan by accusing the country of harbouring Muslim extremists.
However regional rival Pakistan condemned the explosions as "act of terror".
"We deplore these attacks and we sympathise with the victims and their families," foreign ministry spokesman Masood Khan told a weekly press conference.
India's national capital New Delhi was also put on a high security alert after the explosions.
The city's entire police force, particularly those deployed at vital installations, were ordered to stay on high alert, an official said, adding that reinforcements were being rushed to markets and public places.