Maharashtra Governor K. Sankaranarayanan hoisted the national flag and took the salute at the parade in south Mumbai along the Arabian Sea promenade.
Present on the occasion were Chief Minister Prithviraj Chavan, his cabinet colleagues as well as Bollywood actor Salman Khan.
This is the first time the parade has been held at Marine Drive. The traditional venue was Shivaji Park in central Mumbai.
This is the first time the parade has been held at Marine Drive
The parade saw around 25 tableaux put up by government departments and ministries highlighting achievements as well as vintage cars and a cycle rally that were cheered by people from both sides of the Marine Drive.
The crowds were thrilled as the army, navy and air force jointly put up demonstrations and daring display of their capabilities.
There were also cultural shows including traditional Maharashtrian dances and other aspects depicting the state's rich culture and heritage.
Chavan earlier announced that the best float would get Rs.5 million, the second best Rs.2.50 million and the third best Rs.1.50 million.
Meanwhile, the Republic Day was also celebrated in schools, colleges and housing societies, with millions turning out for the festivities.
The tricolour was hoisted across the state in official and private functions -- in district towns and villages.