Television images showed the rocket exploding in smoke and fire just after it launched Saturday from the Sriharikota space center in Andhra Pradesh state. It was carrying a GSAT-5P communication satellite into orbit.
The vehicle developed an error 47 seconds after liftoff and lost command, leading to a higher angle in the flight, said K. Radhakrishnan, chairman of the Indian Space Research Organization.
"That caused a higher stress, breaking up the vehicle," Radhakrishnan told reporters.
In April, a similar rocket on a developmental flight plunged into the Bay of Bengal. The ISRO said its rotor seized and turbine casing ruptured, probably due to excessive pressure and thermal stresses.
Yashpal, a retired Indian scientist and independent commentator, said he was very disappointed by Saturday's failure, but other countries too have experienced such problems.
"I hope it's just one of those things," Yashpal, who uses one name, told reporters.
India is planning its first manned space flight in 2016.
An Indian satellite launched in 2008 to orbit the moon was abandoned last year after communication links snapped and scientists lost control of the satellite.
India is the fifth country after United States, Russia, China and France to enter the commercial satellite launch market.
The country has sought to convert its rise as an economic power built on a thriving high-tech sector - into global clout in other areas.
Since 1994, India's space program has launched a number of Indian-made satellites. It's also been able to launch nine successful space flights consecutively.