Around 94 million voters will cast their votes at more than 100,000 polling stations in Delhi, Rajasthan, Madhya Pradesh and Chattisgarh states, all of them ruled by the main opposition Congress party.
More than 500,000 election workers backed by 400,000 police and troops are on guard as the 102,056 polling stations opened at 0230 GMT for nine hours of voting.
In the fray for the 590 assembly seats are 5348 candidates.
Results are expected to be released late on Thursday along with that for the northeastern state of Mizoram, which is ruled by a regional party and voted on 20 November.
Casting her vote, Delhi Chief Minister Sheila Dikshit said the Congress had turned the capital of 14 million people into a modern city.
"We have done our job and now we await the approval of the people of our work"
Delhi Chief Minister
"We have done our job and now we await the approval of the people of our work," Dikshit said.
The elections, though being fought on local issues like roads, power, water and jobs, are seen as a test of Prime Minister Atal Behari Vajpayee's governance at the centre.
There is widespread belief that a strong showing by Vajpayee's Bharatiya Janata Party (BJP) could lead the federal government to call national elections before the October 2004 deadline.
Several surveys have predicted that the Congress will retain power in three states with the BJP likely to wrest control in Madhya Pradesh.
"If anything, a defeat in these elections, where it's (solely) a BJP versus Congress fight, will have an adverse moral impact on Vajpayee's performance at the federal level," said political analyst Mahesh Rangarajan.
"It is not a referendum as such on Vajpayee's performance in New Delhi," Rangarajan said. "The issues involved here are too local. But yes, if he loses badly, morally it will a beating."
But Zoya Hassan of Jawaharlal Nehru University in New Delhi noted that the Congress was defending its record in the four states.
"The BJP had hyped the anti-incumbency business and if the Congress wins three out of the four states it will be a vindication of Congress governance," she said.
The BJP heads a multi-party coalition at the federal level but has seen its power slip regionally in the last two years and currently rules only three of India's 28 states.
"The BJP is very confident of winning in all the four states because these areas have suffered by the misrule of the Congress - in Delhi and Rajasthan for five years and in Chattisgarh and Madhya Pradesh for the last 10 years," said BJP spokesman Prakash Javadekar.
The BJP has dubbed the vote "semi-finals" to next year's national elections.
"There is little doubt that the template for the grand
finale of 2004 will be set by the outcome in the four... states," said the Hindustan Times newspaper, adding the results would influence smaller parties in choosing who to ally with next year.