The aircraft, an HJT-16 Kiran Mk2 trainer built by Hindustan Aeronautics, crashed a couple of minutes before noon near the old Begumpet Airport in the heart of the city.
Thousands of people were enjoying the spectacle when disaster struck, sending thick clouds of smoke into the air.
The aircraft, part of the navy's aerobatics team that uses four trainers, was unable to pull up from a dive and went into a spiral as the planes were breaking away from the formation and going at different directions.
There were no casualties on the ground, police said.
According to witnesses, the plane had crashed into the mobile phone towers on top of the building. They heard a loud boom, after which the plane went down.
Residents were in a state of shock.
Said Ashok, who was in his house at the time: "I was inside the house when I heard a loud noise and I came out to see flames."
Indian Navy spokesman Commander P.V. Satish said in New Delhi that he had no details but confirmed the accident had taken place.
India navy craft crashes at show
 The crash took place during an air show |
An Indian navy aircraft taking part in an an air show in the southern city of Hyderabad has crashed.
Local TV channels showed pictures of the Suryakiran plane crashing into a residential area as it was performing an acrobatic routine.
Smoke could be seen rising from a building. It is not yet known what caused the crash.
The India Aviation 2010 show, a civil aviation exhibition, opened on Wednesday and will go till 7 March.
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