Officials said the rioting erupted in a crowded neighbourhood of Aligarh town in the northern state of Uttar Pradesh on Thursday after Muslims objected to the use of loudspeakers overnight by Hindus, who were celebrating the birthday of the Hindu god-king, Rama.
"Additional police, including riot police, have been deployed in affected areas and a curfew has been imposed," said S K Aggarwal, the principal home secretary for Uttar Pradesh.
Knives, bricks and bamboo sticks were used in the fighting, and police reported gunshots. Eight of the injured were in a critical condition, officials said.
Aligarh, which has a large Muslim population, has been the scene of frequent clashes between Hindus and Muslims in the past.
India's most-populous Uttar Pradesh state, which has a 17% Muslim minority, has a history of communal violence.
Eighteen people were killed and dozens were injured last month in bombings carried out by Islamic militants in Uttar Pradesh's holy Hindu town of Varanasi.
Though communal tensions in India have eased in the past two years, violence flares easily in crowded towns of the north and the west where the country's Hindu majority and Muslim minority live side by side.