The BSE index is down 0.5 percent, while the 50-share NSE index is 0.71 percent lower, heading for a fourth consecutive session of declines.
The indexes fall on continued worries after a regional party withdrew from the ruling coalition, while concerns about growth remain after the central bank issued a cautious statement on monetary policy on Tuesday.
Global market uncertainty also weighs after a bailout plan for Cyprus fell into disarray, although hopes of a last-minute deal kept losses in Asian shares limited.
Broader losses are capped as defensives shares gain. Hindustan Unilever gains 2.6 percent, while Cipla is up 2 percent.