The ritual at the Baba Umer Durga, a Muslim shrine, is believed to have been followed for nearly 700 years, and each year hundreds of people, both Hindus and Muslims, take part in the ritual.
Local officials told television news stations there had been no reports of injuries.
The infants, mostly under two years old, were dangled Thursday from the roof of the shrine near Sholapur, about 450 kilometers (280 miles) south of Mumbai, before being dropped about 50 feet (15 meters) onto a bedsheet held aloft by parents and other believers.
Television channels showed the babies screaming as they were shaken in the air before being dropped.
With high child mortality rates, especially in India's rural areas, many people resort to rituals which they believe can ensure their children's health.
Child rights activists expressed outrage after the Headlines Today television channel showed the babies being dropped.
"This shows the complete failure of the local administration to prevent this practice and to create awareness about children's health," said Ranjana Kumari, a civil rights activist in New Delhi.
"It is also a reflection of the lack of access to health services, that forces people to behave in this irrational manner," Kumari told the AP.
India's National Commission for Protection of Child's Rights issued a notice Thursday to the local administration in Sholapur and has begun investigations into the practice.
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