Many aides of the gang have been arrested by Punjab Police in the past.
Chief Minister Bhagwant Mann expressed shock over the killing and appealed to stay calm.
"I am shocked and deeply saddened by the gruesome murder of Sidhu Moosewala. Nobody involved will be spared. My thoughts and prayers are with his family and his fans across the world. I appeal everyone to stay calm," Mann tweeted.
In less than 24 hours after his security was curtailed by the government, Moosewala, with a huge fan base running into millions, was shot dead by gangsters close to his ancestral village in Mansa in Punjab in broad daylight on Sunday, police said. He was 29 years old.
Moosewala was taken to a nearby hospital where he was declared dead. The civil surgeon at Mansa hospital said Moosewala was brought dead, while the two others were referred to another hospital for treatment.