Parents and friends of students were photographed climbing school walls to pass on answers.
Many of those arrested were parents. At least 750 students have been expelled.
An estimated 1.4m students are taking their school leaving exams in Bihar alone - tests seen as crucial for their chances of a successful career.
The authorities have clearly been embarrassed by the cheating, the BBC's Jill McGivering says, with the episode prompting ridicule on social media.
Students were seen copying answers from smuggled-in note sheets, and police posted outside test centres were even seen being bribed to look the other way.What do the authorities have to say? Natch, they're underfunded;
State Education Minister PK Shahi said it would be difficult to conduct fair exams without help from parents, given the potential number of people involved.
"Three to four people helping a single student would mean that there is a total of six to seven million people helping students cheat," he said.
"Is it the responsibility of the government alone to manage such a huge number of people and to conduct a 100% free and fair examination?"