CWC is one of the biggest public warehouse operators in India, offering fumigation and other services.
In a letter, PETA pointed out that in addition to breaching the Prevention of Cruelty to Animals Act, the gassing violates the guidelines of the Directorate of Plant Protection, Quarantine and Storage in Faridabad.
"There are no excuses for suffocating rats with poisonous gas when sophisticated gas detectors have been in use for years," said Science Policy Advisor of PETA, Chaitanya Koduri.
"We're asking the Central Warehousing Corp to stop this barbaric and illegal practice immediately. If it refuses, we will ask the Civil Aviation Department and Airports Authority of India to make it stop," he added.
PETA officials said a whistleblower alerted them that caged rats are kept inside a chamber filled with poisonous gases, such as the insecticide methyl bromide, and left to suffocate and die.
The whistleblower also helped the group rescue a rat that had been used by an airline at Mumbai's domestic airport.
In its letter, AWBI chairman R.M. Kharb asked CWC to take corrective action by ending the illegal use of live rats.
"It is illegal to subject healthy, live animals to death by poisoning. Your use of live rats in fumigation tests irrefutably causes animals to suffer and should be stopped without delay," Kharab said his letter.