The extension, brokered by the International Transport Workers Federation with ship owners and managers, came into effect on April 1 and is designed to protect sailors and vessels at risk of attack.
"It [the zone] is extended up to the Indian coast and we don't think that that is the right thing to do," Captain H. Khatri, a deputy director-general of shipping at the Directorate General of Shipping in Mumbai, told AFP.
"There are no piracy incidents in these waters so it shouldn't be an issue," he added.
The extension provisions include increasing security on ships traveling in the area to reduce the risk of attacks and paying compensation to seafarers if their vessel is targeted or if they are injured or killed.
An agreed "high risk zone" with similar terms lies off the coast of Somalia, where an international force is patrolling to protect shipping in the busy maritime corridor.
India's opposition to the extension comes as the country's coastguard and navy are on high alert against pirates seeking to evade the clutches of the international force by attacking shipping in the eastern Indian Ocean.
More than 100 pirates have been caught and are awaiting trial in India following a series of violent skirmishes near the country's Lakshadweep islands since the start of this year.
Last week, an Indian navy reconnaissance aircraft forced pirates to flee as they attempted to hijack a Panamanian-registered cargo ship about 800 km (500 miles) off Mumbai.