The move comes a day after the H5N1 virus was confirmed in samples from chickens that died on a farm in Chenngmeirong village in India's Manipur state, near the border with Myanmar.
Health workers were going to houses in the area to see if anyone was complaining of influenza-like symptoms, while 21 people who lived in the immediate vicinity of the infected farm were being preventatively treated with drugs, said Dorendra Singh, Manipur's animal husbandry director.
Some 130 dead chickens were found earlier in the month and samples were sent to India's High Risk Animal Disease Laboratory in the central Indian city of Bhopal.
Bird Flu was found in seven of the eight samples, said Upma Chowdhry, a senior official in the federal Animal Husbandry Ministry in New Delhi, adding that 150,000 birds would be slaughtered.
Singh said the disease appeared to be confined to Chenngmeirong.
"Samples collected from within a five-kilometer (three mile) radius of the farm have tested negative," Singh said.
India confirmed an outbreak of H5N1 in the west last year, but declared itself bird flu free after slaughtering hundreds of thousands of chickens. No human cases were reported.
Most of the fatalities have been among people who work in close contact with poultry.