The leak from the LG Polymers plant in the city of Visakhapatnam in Andhra Pradesh state came as people slept.
Doctors say patients have been complaining of a burning sensation in the eyes and difficulties breathing.
Areas around the plant have been evacuated. The leak may have been due to negligence, officials say.
Reports suggest initial attempts to control the gas leak were unsuccessful but the company and state officials say the situation is now under control.
LG said in a statement it was investigating the cause of the incident, and was looking at ways "to provide speedy treatment" for those affected.
Rajendra Reddy, a senior official in the Andhra Pradesh Pollution Control Board, told the BBC that the leaked gas was styrene, which is usually refrigerated.
Prime Minister Narendra Modi called an emergency disaster meeting.