The clash between Samajwadi Party member Naresh Agarwal and Congress party's Mani Shankar Aiyar took place amid loud demands in the Upper House for a discussion on the killing of Indian jawans by Pakistan.
Mr Aiyar, a former petroleum minister, said there were other issues that needed discussion, and questioned Samajwadi Party members whether they were not concerned about gas prices.
SP's Naresh Agarwal hit back with an insult targeted at Mr Aiyar, which was immediately expunged by Rajya Sabha chairman Hamid Ansari.
A furious Mr Aiyar rushed out of his seat towards Mr Agarwal shouting: "How dare you call me that!" He was stopped by other members, but the angry exchanges continued until the chairman adjourned the house.
"How could you say such a big thing?" former Law Minister Ashwani Kumar asked the SP member. Some Left MPs were also seen criticizing Mr Agarwal.
Later, Trinamool MP Derek O' Brien tweeted: "Two senior MPs on either side of me almost came to blows in the RS (Rajya Sabha). What are we coming to?"