Police said they ambushed a group of 40 armed rebels late Thursday as they passed through a village in Taimara Ghati valley area, close to the state capital Ranchi.
The nine-hour gunfight ended Friday morning after police recovered four bodies from the spot.
"We presume other members have fled but a search operation is on," Ranchi police chief Kuldeep Dwivedi told AFP.
Two paramilitary personnel were also injured in the gunfight.
India's long-running Maoist insurgency began in the 1960s, inspired by Chinese revolutionary leader Mao Zedong, and has cost thousands of lives.
The rebels, described by former prime minister Manmohan Singh as India's most serious internal security threat, say they are fighting authorities for land, jobs and other rights for poor tribal groups.
The rebels operate in at least 20 Indian states but are most active in the forested, resource-rich areas of Chhattisgarh, Orissa, Bihar, Jharkhand and Maharashtra.