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.
Banks extend falls with ICICI Bank down 1.9 percent and State Bank of India falling 2.8 percent.
Broader losses are capped as defensives shares gain. Hindustan Unilever gains 2.6 percent, while Cipla is up 2 percent.