Indian navy divers have entered a crippled submarine that was hit by twin explosions but have yet to reach any of the 18 sailors who are feared dead inside, a naval official said.
The Russian-built submarine had also been damaged in a deadly explosion in 2010 and had only recently returned to service.
Prime Minister Manmohan Singh honoured those killed in the explosion and fire. "We pay homage to these martyrs," he said during a speech to mark the anniversary of India's 1947 independence from Britain.
The navy official said water was being pumped from the flooded, diesel-powered submarine so it could be raised completely to the surface. It is partially submerged at a dock in a Mumbai navy base, with a portion visible above the waterline.
He said there had been no contact with the sailors since the explosions, which lit up the sky above the base. The official said there appeared to be no way the sailors could have survived the intensity of the blasts and fire.
"We hope for the best but we have to prepare for the worst," Admiral DK Joshi, the navy chief, told reporters earlier in Mumbai.
The explosions in the submarine's torpedo compartment sent a huge fireball into the air and nearby sailors jumped into the sea in panic. It is shaping up to be another embarrassment for India's military, which has been hit with a corruption scandal as it races to modernise its forces.
Because the submarine was docked, navy watchmen were on the submarine rather than the normal crew, Mr Joshi said. At least some weaponry exploded in the near-simultaneous blasts, he added.
A video of the explosions filmed by bystanders showed an enormous ball of red and yellow fire rising hundreds of feet into the air. About a dozen fire engines rushed to the dockyard and extinguished it in about two hours, officials said.
Navy spokesman Narendra Vispute said the cause of the explosions was being investigated. The 16-year-old Russian-made submarine, INS Sindhurakshak, was hit by an explosion in 2010 that killed one sailor and injured two others. The navy said that accident was caused by a faulty battery valve that leaked hydrogen, causing an explosion in the vessel's battery compartment.