Kanker district, where the clash occurred, will vote in the second of seven phases in the elections on April 26 while neighbouring Bastar, a Maoist stronghold, votes in the first phase on Friday.
The rebels, who ascribe to a form of communism propagated by late Chinese leader Mao Zedong, have waged a guerrilla-style struggle against the government, especially in central and eastern India, for decades, leading to periodic clashes and casualties on both sides.
Police officials said they received a tip-off about the presence of Maoists in the area on Tuesday and launched a raid that led to the gunbattle, which also injured three members of the security forces.
"After the encounter, during the search of the area, bodies of 29 Maoists were recovered," police said in a statement, adding that several weapons and ammunition were also seized from the location.
Maoists say they are fighting to give poor Indian farmers and landless labourers more control over their land and a greater claim to its minerals currently exploited by major mining companies.
Indian Home Minister Amit Shah, while campaigning in Chhattisgarh on Sunday, vowed to eliminate insurgency from the state within three years if Modi's Bharatiya Janata Party (BJP) is voted back into power.
