Anisur Rahaman, West Bengal's animal resources minister, said: "Our objective is to cull up to 400,000 chickens and contain the virus from spreading at any cost."
More than 300 veterinary workers and volunteers killed the birds by breaking their necks and in some cases stuffing them in gunny sacks and burying them alive. Eggs were also destroyed.
A Reuters photographer in Margram village, the epicentre of the latest outbreak, saw worried villagers watch the culling process from a distance and help dig pits to bury the birds.
Health workers were also monitoring people for flu symptoms.
"Our objective is to cull up to 400,000 chickens and contain the virus from spreading at any cost"
Anisur Rahman, West Bengal animal resources minister
Some of them, who said they did not know about bird flu, had eaten the dead birds and were now worried about their health.
Asadul Islam, a poultry farmer in Margram, told Reuters: "Nobody warned us and we ate seven to eight dead birds."
In some villages, people lined up at the local health centre for a check-up.
Protection did not seem to be of much importance as many in other villages of the affected districts were seen holding dead pigeons and crows with their bare hands.
In some areas, people wrapped their hands in plastic bags and buried dead chickens.
To contain the spread of the virus, West Bengal has sealed a stretch of its border with Bangladesh, where 72 farms in 23 districts have been infected with the virus.
Humans are typically infected by coming into direct contact with infected poultry, but experts fear the deadly H5N1 virus may mutate into a form easily transmissible between humans.
The infection has killed more than 200 people worldwide since 2003.