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Several hospitals in the Indian capital Delhi have completely run out of oxygen and doctors say other hospitals have just a few hours' worth of supply left.
A number of people have died while waiting for oxygen, and more than 99% of all intensive care beds are full.
India is in the grips of a second wave of Covid infections and on Thursday recorded the highest one-day tally of new cases anywhere in the world.
There have been reports of state authorities stopping oxygen tankers from travelling to other states, according to Delhi television station NDTV. Some facilities have been accused of hoarding their supplies.
Delhi is known to have among the best healthcare facilities in India, but it has been brought to its knees by the latest surge in cases, reports Bbc.
Families are also waiting hours to perform funeral rites, crematoriums are holding mass cremations, and working day and night in several cities.
In January, the pandemic was relatively under control, but since then the situation has gone from bad to worse, for a number of reasons.
India has seen a rapid rise in case numbers over the past month driven by lax safety protocols, a Hindu festival attended by millions and variants of the virus, including a "double mutant" strain.
Prime Minister Modi chaired a high-level meeting on Thursday to discuss the oxygen supply issue. According to a government statement, he was told that an "elaborate exercise" is under way, with state governments to identify their needs so they can be supplied with oxygen.
The country has recorded close to 16 million confirmed infections.
There have been 314,835 new coronavirus cases in the past 24 hours, while deaths rose by 2,104./bbc
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