More than 25,000 chickens and ducks have already beenslaughtered in Tripura state this month after eight villageswere hit by the H5N1 strain.
On Tuesday, officials said bird flu had spread to a newarea.
"Bird flu has been confirmed for the second time inTripura," Kartick Debbarma, a senior animal resources officialsaid in Agartala, Tripura's capital. "It is the H5N1 strain."
The remote northeastern state bordersBangladesh, wheremore than half the country's districts have been affected bythe virus.
In India, the virus resurfaced in the eastern state of WestBengal in January this year, forcing authorities to cull morethan four million birds.
Since then the virus has flared up intermittently, hittingpoultry sales in the region.
Many states banned poultry products, pulling down pricessharply and prompting farmers to cut production.
The World Health Organization described the Januaryoutbreak in West Bengal as the worst ever in India.
Officials in Tripura said they were holding meetings anddrawing up their strategy to contain the disease, which has hitMohanpur, a town just 20 km (12 miles) west of Agartala.
Health department officials were also checking humans forany flu-like symptoms.
While no human cases have been reported in India, expertsfear the H5N1 virus might mutate or combine with the highlycontagious seasonal influenza virus and spark a pandemic thatcould kill millions of people.
Since the virus resurfaced in Asia in late 2003, at least240 people have died from bird flu in a dozen countries, theWHO says.
(Reporting by Biswajyoti Das; Editing by Bappa Majumdar andDavid Fogarty)