Two firemen who rescued 27 people were hailed as heroes Monday after Delhi's deadliest fire in decades killed 43, prompting outrage that safety regulations were yet again ignored.

The blaze early Sunday ripped through a four-storey building that housed small factory units in the congested lanes of the Old Delhi district while the migrant workers inside were asleep.

Firefighter Rajesh Shukla, who carried out 11 people and was injured in the dangerous operation, said he was shocked by the number of people he found.

"No one in the area informed us that so many people were there in the building, some said there were three or four people trapped inside," Shukla told the Times of India daily.

"I saw at least 30 people in the room (on the third floor) with most of them sleeping. A few others were dead... We were told that the labourers slept in shifts," he said.

He added that if the fire brigade had had more information sooner, then "we could have saved more lives".

On Monday, charred walls and smoke-blackened windows bore a grim testimony to the tragedy that unfolded at the cramped premises.

Locals told AFP that all illegal factories in the area pull down and lock their shutters at night, which gives workers time to flee if police raid the premises.

"But this time it proved fatal for them as a lot of precious time was lost in trying to enter the building," a local resident said, as officials from the electricity department arrived at the scene.

- 'Lost everything' -

New Delhi factory blaze / © AFP

Firefighter Ashish Malik, who managed to carry out 16 people from the blazing building, said they "had to take huge risks" carrying people down the only staircase on a rickety floor.

"We rescued workers by carrying them on our shoulders. Some had to be dragged," he said.

Zameel Ahmed, who lost two of his sons aged 32 and 34 in the inferno, was inconsolable.

"Five of my grandchildren have lost their fathers. We have lost everything."

Hardeep Singh Puri, Indian housing and urban development minister, hit out at the Delhi state government for allowing the owners of the building to operate with "impunity".

The lanes were narrow and congested with wires and cables dangling dangerously, he said in a statement, adding the building flouted safety and fire norms.

"If all these (city) departments had done their job properly then many valuable lives could have been saved," he said.

Police said the owner of the building and its manager have been arrested and that the illegal factory units inside had been operating without fire safety clearance.

One of the units manufactured wall mirrors, one was involved in the stitching of schoolbags and another stitched skull caps, the Press Trust of India news agency reported.

Such firms often provide sleeping quarters for poor workers, mostly migrants from elsewhere in India who save money by bedding down at their workplaces.

Some were paid just 1,000 rupees ($14) a month.

Locals said the building, which also made purses and jackets, had just one entrance. Twenty rooms on each floor were connected by a single internal stairway.

Prime Minister Narendra Modi tweeted that the fire, the deadliest in Delhi since 59 people perished in a burning cinema in 1997, was "extremely horrific".