More than 200 people – including 53 British nationals – were on board flight AI171 to London Gatwick.
Taken from what appears to be a property, harrowing footage shows the aircraft descending over a residential area.
India plane crash latest: Follow live updates
It crashed in an area called Meghani Nagar at 1:38pm local time on Thursday, according to Faiz Ahmed Kidwai, the director general of the directorate of civil aviation.
Its wheels are still down, as you would expect from take-off.
The plane then disappears behind buildings as it descends.
A massive explosion follows as a huge fireball erupts and thick black plumes of smoke can be seen rising into the skies.
Flight tracking website Flightradar said a signal was last received from the aircraft less than a minute after take-off.
Read more: What we know so far
It is the first ever crash of a Boeing 787 Dreamliner, according to the Aviation Safety Network database.
Air India said 242 people, including 169 Indian nationals, 53 British nationals, seven Portuguese nationals and one Canadian national, were on board the flight.
In a statement, London Gatwick said the flight was due to land at 6.25pm local time on Thursday.
India’s civil aviation minister Ram Mohan Naidu Kinjarapu said: “Rescue teams have been mobilised, and all efforts are being made to ensure medical aid and relief support are being rushed to the site.”
