"The problem was the smoke. All the windows and doors were shut and there was dense smoke inside," said Deputy Chief Fire Officer Sunil Choudhary.
"No one could get out. There was an iron door and it was locked and people were brought out only after we broke the door open. It had become a toxic chamber."
The deadly blaze erupted at about 4:00 am local time in the city's old quarter, a congested area with numerous small unauthorized factories and storage units.
Deputy police commissioner of New Delhi's north district Monika Bhardwaj told AFP that the death toll had risen to "43, with 16 others still admitted at the local hospitals".
"Fire department has completed the rescue work. There are no more bodies at the site," said Bhardwaj, adding that they "don't yet know the cause of the fire but know that it was aggravated because of plastic packing pouches, bags and other such material there."
At least 43 people have died in a massive fire that broke out in a bags-manufacturing unit operating from a building in New Delhi in the early hours of Sunday, official sources said. Many of the victims were laborers who were sleeping and did not realize there was a fire. pic.twitter.com/2uG7MAcUtA
Fire officials said they had struggled to reach the factory in the narrow area, whose busy lanes are lined with many small manufacturing units.
Among the 35 engines stationed near the site, only one was able to get to the building and extinguish the blaze using a relay system, the fire department said.
The Minister of Food and Civil Supplies Imran Hussain told reporters that the Delhi state government will conduct a probe and take action against those responsible for the fire.
Chief Minister of Delhi Arvind Kejriwal described the incident as "very very tragic news" and announced a compensation of a million rupees (US$14,000) for the families of the dead.
As building laws and security norms are often neglected both by builders and residents in India, such incidents are a common occurrence.
In the big cities of India like New Delhi, the factories and small manufacturing units are located in old, crowded quarters where the cost of land is relatively cheaper. Such units frequently serve as sleeping quarters for poor, mostly migrant workers, who try to save money by saving the cost of rent and sleeping at their workplaces.