The experiments were part of the then imperialist power's preparations for World War II UK's National Archive documents reveal.
But then the British military did not check up on the Indian soldiers after the experiments to see if they developed any illnesses.
It is now recognised that mustard gas can cause cancer and other diseases, The Guardian reported on Saturday.
Many suffered severe burns on their skin, including their genitals, leaving them in pain for days and even weeks. Some had to be treated in hospital.
The lasted more than 10 years at a military site in Rawalpindi, now in Pakistan. The Indian troops were serving under the command of the British military at a time when undivided India was under colonial rule.
"Severely burned patients are often very miserable and depressed and in considerable discomfort, which must be experienced to be properly realised," the Guardian report said.
The experiments in Rawalpindi were part of a much larger programme intended to test the effects of chemical weapons on humans.
The UK Ministry of Defence could not could not say whether the Indian soldiers were volunteers in the experiments.
It said: "The studies undertaken at the Chemical Defence Research Establishment in India included defensive research, weapons research and physiological research. These studies supported those conducted in simulated conditions in the UK in a different environment."