Three people were killed and many others taken ill on Monday following a toxic gas leak inside a hand tool manufacturing factory in the northern Indian state of Punjab, police said.

The incident occurred in an industrial area in Ludhiana, about 105 kilometers west of Chandigarh, the capital of Punjab.

"We are being told that a tank cleaning work was underway in a factory at Industrial Area A in Ludhiana when toxic gas suddenly started leaking. Within minutes, the gas spread throughout the premises. The gas concentration was so intense that workers inside had no time to escape," a senior police official said.

The authorities have launched an investigation to ascertain the exact cause of the gas leak.