Mistry, 54, was one of two people who died when the car they were traveling in hit a barrier between two lanes, according to Shrikant Shinde, a Maharashtra police official.
Two other people in the vehicle were injured and taken to hospital, he added.
Autopsies would be carried out on the two deceased at a hospital in Mumbai, said Pradeep Dhodhi, a Palghar district medical official.
Mistry is best known as the former chairman of Tata Sons, the massive Indian conglomerate that owned Jaguar, Land Rover and the Taj hotels.
Mistry was best known as the former chairman of Tata Sons, the massive Indian conglomerate that owned Jaguar, Land Rover and the Taj hotels.
The Irish-Indian businessman made headlines in 2011 when he was announced as Tata's chosen successor, and became the first person not directly related to the Tata family to head the company bearing their name.
Mistry's family was a major stakeholder in the Mumbai-based conglomerate, which runs top-tier companies across several sectors.
In 2016, Mistry was replaced in a sudden corporate shakeup that led former Chairman Ratan Tata to come out of retirement to lead the firm on a temporary basis. Mistry ouster created a bitter public feud between the former chairman and the group's board.
Prior to his time with Tata, Mistry was best known as the son of Indian construction billionaire Pallonji Mistry and served as head of Shapoorji Pallonji Group, a major construction company known for erecting skyscrapers and stadiums across India.
"I am deeply saddened by the sudden and untimely demise of Mr. Cyrus Mistry," Tata Sons Chairman Natarajan Chandrasekaran said in a statement shared with CNN Business on Monday.
"He had a passion for life and it is really tragic that he passed away at such a young age. My deepest condolences and prayers for his family in these difficult times."
Other business and government leaders also reacted with shock over the weekend, taking to social media to express their condolences.
"The untimely demise of Shri Cyrus Mistry is shocking. He was a promising business leader who believed in India's economic prowess," Indian Prime Minister Narendra Modi tweeted. "His passing away is a big loss to the world of commerce and industry."
Gautam Adani, the country's richest man, also said he was "shocked and saddened to hear of the passing."
"One of the finest gentlemen I have known, he was one of the best business minds of his generation. It is a tragic loss. He was called away too soon," he wrote on Twitter. My thoughts and prayers are with his family."