Activists said about a dozen of their leaders had been detained before Prime Minister Narendra Modi officially opened the tribute to Sardar Vallabhbhai Patel, with an air force jet flyover, helicopters showering flowers on the statue and fireworks in the green, orange and white national colours.
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"Today is a day that will be remembered in the history of India," said Modi who hailed Sardar Patel's "strategic thinking" in bringing together the disparate country after independence in 1947 and the Statue of Unity as "a symbol of our engineering and technical prowess."
But around the statue in a remote corner of Gujarat state, more than 5,000 police guarded the huge site where construction work has taken nearly four years to complete the megaproject. Hundreds of Chinese have been among the 3,500 workers.
Anand Mazgaonkar, a community group leader in Narmada district, said plain clothes police took away 12 people late Tuesday to the local police headquarters.
Police denied they had made any detentions. But authorities took no chances in case community groups staged protests to demand compensation for land taken to erect the statue of Unity, which cost $400 million.
"Police patrolling has been intensified in the wake of protests by the local tribal community and leaders. Drones and helicopters will be keeping watch on the entire area," said Narmada police inspector general Abhay Chudasama ahead of the ceremony.
The chiefs of 22 local villages signed a letter calling on Modi to stay away from the inauguration. Posters of Modi with Gujarat chief minister Vijay Rupani were torn down or had their faces blackened at the weekend. Police kept watch on posters put in place of the torn ones.
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Local legislator and community group leader Chotu Vasava said: "Tribal groups have been exploited by different governments, the ruling BJP (Bharatiya Janata Party) is repeating it again." "I am not against Sardar, but what is the use of the statue if the people on the land have to suffer and are moved from their homes?"
More than 80 percent of the local population are from tribal groups with special protected status. The Gujarat government said the 185 families moved to make way for the statue had been compensated and given 1,200 acres (475 hectares) of new land.
Modi, whose nationalist government has made the statue one of its flagship projects, paid tribute while the air force jets roared overhead and dance troupes performed.
Sardar Patel's name had been largely overshadowed by the Nehru-Gandhi dynasty that has dominated Indian politics since 1947. But Modi-inspired nationalists have sought to put their hero back in the forefront.
The statue is more than twice the size of New York's Statue of Liberty and also dwarfs the 128 metre high Spring Temple Buddha in China, the world's next-biggest statue. It is made up of nearly 100,000 tonnes of concrete and steel. Online booking to visit the Statue of Unity has opened with a 350 rupee ($4.75) admission fee for the 153-metre-high observation deck.
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Indian authorities hope the statue will attract 15,000 visitors a day to the remote corner of Gujarat, which is about 100 kilometres (60 miles) from the nearest city of Vadodora.
India is also working on a giant statue of 17th-century warrior king Chhatrapati Shivaji, riding a horse and brandishing a sword, which should dominate the Mumbai shoreline from 2021. The current design would make it 212 metres high.
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