The power outage severely disrupted transport networks including the rail service, while traffic signals went out in major cities, causing huge traffic jams in the capital, New Delhi.
Indian authorities were in the process of restoring electricity to the seven affected states, with officials saying that power would be restored fully by the end of the day.
Hospitals were forced to use emergency generators and water pumping stations ran dry for much of Monday. Electricity was being brought in from India's eastern and western regions, as well as from Bhutan.
Power Minister Sushil Kumar Shinde said he was not sure exactly what caused the power grid failure, and that a committee has been set up to investigate the blackout.
Limited power outages are common in India, but analysts say an outage of this magnitude highlights deficiencies in the country's infrastructure as it strives to become an economic superpower.
India relies heavily on coal for electricity production.
Some information for this report was provided by AFP and AP.