Seven people died when a three-storey building collapsed in heavy rains in western India, an official said Wednesday, the latest deadly accident to highlight shoddy construction standards in the country.

Rescuers were frantically searching for another three people believed trapped under the rubble of the dilapidated building, which crumbled on the outskirts of Indian's financial capital Mumbai late Tuesday night.

"So far we have rescued 10 injured and removed seven bodies while three more are still missing," National Disaster Response Force official Alok Avasthy told AFP.

The building was situated in the Mumbai suburb of Thakurli, in the Thane district of Maharashtra state.

"It was an old structure that had been declared unsafe, yet four or five families continued to reside there," Avasthy said, adding that monsoon rains were hampering the relief effort.