The first Indian-built nuclear submarine has been activated and will undergo sea trials.
Experts say the INS Arihant nuclear submarine is the first ballistic missile submarine known to have been built outside the five recognised nuclear powers, the BBC reports.
Last year, India rejoined those countries - US, UK, France, Russia and China - in being an operator of nuclear-powered submarines when it formally commissioned a Russian-built submarine into its navy.
Nuclear submarines will add a third dimension to India's defence capability, as it has previously only been able to launch ballistic missiles from the air and from land.
As the reactor on board the vessel was activated Prime Minister Manmohan Singh hailed the giant stride in the country's technological capabilities.
Assuming its sea trials are completed successfully, India's new nuclear-powered submarine could be operational within the next two years, a BBC correspondent says.
When it is eventually deployed, the Arihant will be able to carry a crew of about 100 sailors on board. It will be able to stay under water for long periods, increasing its chances of remaining undetected.
By contrast, India's ageing conventional diesel-powered submarines need to surface frequently to recharge their batteries.
Last year India leased the Russian-built nuclear-powered submarine the INS Chakra for 10 years at a cost of about $US1 billion. India had previously operated a Soviet nuclear submarine until 1991.
India and Russia are long-time allies, and Russia supplies 70% of India's military hardware.