The alert was made in four districts of Assam, said Dhruba Hojai, the state's top health official.
Around 150 people could be suffering from the mosquito-carried disease in the worst-affected district, another health official said, speaking on condition of anonymity because he was not authorized to speak to the media.
Hojai was reluctant to say how many people could be infected, as health authorities were still conducting investigations, according to the AP.
Although some patients were showing symptoms, "we are carrying out serum tests to ascertain that it is Japanese encephalitis," he said.
Outbreaks of the disease regularly kill hundreds of people in the impoverished northern state of Uttar Pradesh, where authorities have launched a massive vaccination campaign. Nearly 1,400 people died from an outbreak in the state last year.
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