In 1984, a few months before the disaster, Dilip (Rajpal Yadav), a rickshaw driver, loses his pay source as his rickshaw breaks down while transporting an employee to the Union Carbide pesticide plant in Bhopal. Dilip lives in the slums around the plant with his wife, a son and his sister. He gets a job in the plant as a labourer, and is happy since his daily wage is restored.
The plant witnesses a drop in its revenue due to lower sales of pesticides, and in order to reduce the loss the officials neglect safety and maintenance. Questioning the chemicals used in the plant, Motwani (Kal Penn), a tabloid reporter publishes reports in his makeshift printing press which are disregarded by most of the officials and workers. Roy (Joy Sengupta), the in-charge for the safety of the plant expresses his concerns. The officials however ignore his warnings, and a worker is killed when a drop of methyl isocyanate leaking from a pipeline lands on his arm. The officials deem the worker's irresponsibility as the cause of the accident and the plant continues to function. Dilip is given a better-paying vacant job in the plant despite lacking the skill to operate machinery. A gas leak is prevented by Roy when water is mixed with methyl isocyanate, and in an attempt to stop people from panicking, the official in the plant sabotages the warning siren.
Warren Anderson (Martin Sheen), the CEO of Union Carbide, visits the plant to inspect its functionality, where he is briefed about a plan to connect two additional tanks for storage of methyl isocyanate to increase the output of the plant, ignoring the deteriorated condition of the tanks. Motwani meanwhile meets Eva Gascon (Mischa Barton), a reporter in the Paris Match, and persuades her to get an interview of Anderson. She impersonates the identity of an Associated Press reporter, but fails as her true identity is exposed in between the interview. Motwani convinces Dilip of the danger posed by the chemicals.
As the date of the disaster nears, Dilip arranges a loan for the wedding of his sister. Roy later explains how the company is ignoring safety standards, and that how a future leak might become uncontrolled as the officials had turned off safety measures to reduce the maintenance costs. Roy gives his resignation to the company and advises Dilip not to talk about the plant's safety if he wishes to retain his job. Dilip makes a phone call to Motwani describing what Roy just said, and expresses his fear about the plant's safety, saying he will return to the rickshaw-pulling business as soon as his sister is married.
In order to overcome the increasing revenue loss, the officials shut down the plant, firing most of the workers, including Dilip. The plant officials then order the usage of the remaining methyl isocyanate as soon as possible. Meanwhile, Dilip is busy with the wedding of his sister, and Roy has a final look of the control room. The safety measures fail and a runaway reaction follows. The faulty tanks cause the gas to start leaking, and an attempt to contain the leak fails. The gas escapes to the surroundings and is carried east by the wind. Motwani rushes to alert the people in the vicinity of the plant to vacate and head west, since the warning sirens were previously sabotaged. He meets Dilip, who ignores the warning and asks Motwani to leave the area without causing any hindrance to the wedding. Meanwhile, the guests experience irritation in the eyes and discomfort in breathing. Dilip senses the danger and visits the plant, realising that the plant had been compromised. He rushes back to his residence where he finds his family and relatives dying from acute exposure to the toxic gas. He carries away his son, paying farewell to his wife's corpse and flees the slum.
As the gas shows its effects, a nearby hospital is filled with hundreds of patients reporting cyanide poisoning, and the lack of antidote results in most of the patient's' death. Dilip, on his deathbed, and using the last of his strength, rips off his Union Carbide identity badge and after flinging it away, rests his dead son on the ground. He eventually accepts his fate to die in the highly toxic gas cloud and succumbs to the toxic gas, dying by his son's side. The story jumps to the present day, where a blind boy is holding Dilip's identity badge, and the film ends with Motwani narrating the words "Whatever may be the cause of the disaster, Carbide never left Bhopal". A photo montage depicts the aftermath of the disaster, and pictures of the characters and their real-life counterparts.