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The woman, 34, was found lying unconscious inside an open mini bus in the suburban neighborhood of Sakinaka, Mumbai Police Commissioner Hemant Nagrale said at a news conference Saturday.
She was allegedly raped and assaulted with an iron rod, according to CNN affiliate News-18, who cited a local official. The woman was admitted to Rajawadi Hospital and initially responded to treatment, but died from her injures on Saturday, Nagrale said.
Police arrested a man on suspicion of rape and murder, after allegedly identifying him from CCTV footage, Nagrale added. He is yet to be formally charged and will remain in police custody until September 21.
Balwant Deshmukh, senior police inspector at Sakinaka police station, told CNN the victim and alleged perpetrator were both homeless. If charged and found guilty, the suspect could face the death penalty.
Nirbhaya -- a pseudonym given to the victim, meaning "fearless" -- was raped and assaulted with iron rods, according to court documents, and suffered horrific injuries. She died two weeks after the attack in a Singapore hospital.
Her death cast a spotlight on sexual assault in India, and increased scrutiny on crimes against women. The case marked a turning point in the country, and galvanized millions of women to protest for tougher laws on sexual assault.
"After Nirbhaya, we thought things would change but we keep hearing of (rape) cases every single day. Not a single day goes by where we don't hear of one," Bhayana said. "As activists, we push and probe the government and nation so much, but when we hear of such brutality, we really feel so helpless. I have no words to describe it."
Uddhav Thackeray, the Chief Minister of Maharashtra, of which Mumbai is the capital city, expressed his shock at the "dreadful" incident.
India's rape crisis
The number of reported rapes has risen since Nirbhaya's death, potentially because of a greater awareness surrounding the issue. Experts say the outrage has helped to lift the shame around discussing rape.
Legal reforms and more severe penalties for rape were introduced in the aftermath. These include fast-tracking courts to move rape cases through the justice system swiftly, an amended definition of rape to include anal and oral penetration, and the introduction of new guidelines to do away with the two-finger test -- which purportedly assessed whether a woman had sexual intercourse.
Bhayana, the activist, urged the nation work together to ensure Indian women are protected.
"As a nation, we must think of where we stand right now," she said. "It has been almost 10 years since Nirbhaya, but things are still the same. We need to work collectively otherwise nothing will change.