The mishap is said to have occurred shortly after midnight on August 14.
Fire tenders from the Naval Dockyard as well as the Mumbai Fire Brigade were immediately pressed into action.
An Indian Navy press release said that due to damage suffered as a result of the explosion, the submarine has submerged at her berth with only a portion visible above the surface. The extent of the damage is yet to be ascertained.
The press release further said that about 18 persons were on board the submarine at the time of the accident and efforts are on to ascertain the safety of the personnel and salvage of the submarine.
Further details are awaited.