Men and women of all age groups gathered in front of the Taj Mahal Hotel, one of two luxury hotels targeted by the attackers, at sunset on Wednesday and held a vigil in memory of the victims.
The bloody events unfolded on November 26 last year, as 10 heavily-armed men arrived in Mumbai undetected by boat before storming a number of locations, including the hotels, a popular tourist restaurant, a Jewish centre and the main railway station.
The siege, which last four days, was beamed live across the world on television.
The day of remembrance for the Mumbai attacks comes as India continues to demand Pakistan, where the gunmen are believed to have trained, crack down on armed groups.
While on a visit to the US, Manmohan Singh, the Indian prime minister called on the world to "use all its influence to curb the power of terrorist groups" in Pakistan.
India blamed the attacks on a Pakistan-based militant group, Lashkar-e-Taiba (LeT).
Islamabad has acknowledged the attackers were based in Pakistan and that they left for Mumbai from the southern port city of Karachi, but has denied any state involvement in the attacks.
The Mumbai attacks ended peace talks between the two nuclear-armed neighbours and rivals, with India vowing not to return to the table until all those responsible were brought to justice.
A day ahead of the anniversary Pakistan indicted seven suspects in connection with the attacks. All those in the dock pleaded not guilty to the charges.
Two men detained by the US Federal Bureau of Investigation (FBI) in Chicago are also being investigated by Indian authorities for their links to the attacks.
In Italy, two Pakistanis were arrested last week on suspicion of having sent money to people implicated in the attacks and are being held in custody.
|Indian soldiers took positions outside the Taj Mahal hotel which was under siege [AFP]
The only gunman captured by Indian security forces, Ajmal Amir Kasab, confessed to his role in the killings during his ongoing trial in Mumbai. If found guilty he could be sentenced to death.
Security has been improved in Mumbai since the attacks. Luxury hotels have introduced airport-style checks on bags and visitors, while there is a visible, armed police presence at key locations.
Elite commandos are now stationed in Mumbai and the state police in Maharashtra, of which Mumbai is the capital, have set up their own rapid reaction units.
Sanjay Nirupam, a Congress Party MP, told Al Jazeera: "In the last year, huge, comprehensive security arragements have been made in Mumbai and the rest of the country.
"The coastal area, especially, has been properly secured [with] a lot of checkpoints, a lot of manned police stations, and modern equipment.
"The most important thing is that our Mumbai police was not specialised in tackling terror attacks.
"For the first time, a new police force, called 'Force One' has been established in Mumbai's police, to tackle any future terror attacks," he said.