Despite all efforts by rescue and relief teams, the submarine could not be saved and sank shortly after dawn Wednesday in the high-security Naval Dockyard where it was berthed.
There were at least 18 sailors on board the newly-refurbished vessel when it sank and their fate is not yet known, the sources said.
Only a small portion of the submarine is visible on the surface as it sank in the shallow waters of the Naval Dockyard.
A team of Indian Navy divers have been deployed since morning in an effort to rescue the sailors feared trapped inside the sunken vessel.
Chief of Naval Staff Admiral D.K. Joshi will reach Mumbai in the afternoon to take stock of the situation.
Later, Admiral Joshi will brief Defence Minister A.K. Antony, who in turn is expected to make a statement in parliament later in the day.
A board of inquiry has been ordered.
Shortly after midnight, a huge explosion accompanied by a fire rocked INS Sindhurakshak. Many sailors on board reportedly jumped off to safety.
"However, there is likelihood of some personnel being trapped inside. The details are being ascertained," an official defence ministry statement said at 3.15 a.m.
The cause of the explosion and blaze was not immediately known.
--IANS (Posted on 14-08-2013)