The plane was on Thursday headed to Gatwick airport in the UK, Air India said, while police officers said it crashed in a civilian area near the airport.
Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner, one of the most modern passenger aircraft in service.
"At this moment, we are ascertaining the details and will share further updates," Air India said on X.
There were 169 Indian nationals on board, 53 British nationals, 7 Portuguese and 1 Canadian on board, a source said.
The crash occurred just after the aircraft took off, television channels reported. One channel showed the plane taking off over a residential area and then disappearing from the screen before a huge cloud of fire rising into the sky from beyond the houses.
Visuals also showed debris on fire, with thick black smoke rising up into the sky near the airport.
They also showed visuals of people being moved in stretchers and being taken away in ambulances.
According to air traffic control at Ahmedabad airport, the aircraft departed at 1.39pm from runway 23. It gave a "Mayday" call, signalling an emergency, but thereafter there was no response from the aircraft.
Flightradar24 also said that it received the last signal from the aircraft seconds after it took off.
"The aircraft involved is a Boeing 787-8 Dreamliner with registration VT-ANB," it said.
Boeing did not immediately respond to a request for comment.
The last fatal plane crash in India involved Air India Express, the airline's low-cost arm.
The airline's Boeing-737 overshot a "table-top" runway at Kozhikode International Airport in southern India in 2020. The plane skidded off the runway, plunging into a valley and crashing nose-first into the ground.
Twenty-one people were killed in that crash.Â
