<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-12-03</periodOfReport>

    <notSubjectToSection16>1</notSubjectToSection16>

    <issuer>
        <issuerCik>0000887708</issuerCik>
        <issuerName>CARACO PHARMACEUTICAL LABORATORIES LTD</issuerName>
        <issuerTradingSymbol>CPD</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0000941390</rptOwnerCik>
            <rptOwnerName>HAGELSTEIN DAVID A</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>36801 WOODWARD AVE</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 313</rptOwnerStreet2>
            <rptOwnerCity>BIRMINGHAM</rptOwnerCity>
            <rptOwnerState>MI</rptOwnerState>
            <rptOwnerZipCode>48009</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <remarks>David A. Hagelstein is no longer subject to File Form 4, pursuant to Section 16 requirements.</remarks>

    <ownerSignature>
        <signatureName>/s/ Jennifer Evans, Power of Attorney</signatureName>
        <signatureDate>2004-12-03</signatureDate>
    </ownerSignature>
</ownershipDocument>

