A Pakistani fishing boat laden with explosives bound for India blew up, killing all four people on board, after the Indian coast guard tried to stop and search it, the Indian government said on Friday.
It was not possible to independently verify the Indian account. In a first reaction, Pakistan's foreign ministry said it was unclear whether the incident had happened at all.
Indian intelligence said the crew was planning "an illicit transaction" when the vessel was intercepted on New Year's Eve in the Arabian Sea, 365 km (225 miles) off India's western coast, according to a government statement.
India put security agencies on nationwide alert for a militant strike last month in the lead-up to a visit by US President Barack Obama at the end of January.
Ajay Kumar Pandey, a spokesman for the Indian Coast Guard, declined to comment when asked whether the explosives believed to be on board the boat, which sank, were intended for use in a possible attack.
The Indian defence ministry released blurred nighttime photographs of a burning fishing boat, with timestamps around 4 a.m. on New Year's Day.
No name or other distinguishing characteristics were visible on the burning boat. No other physical evidence was presented by the Indian government.
The Indian Coast Guard chased the Pakistani boat for almost an hour and fired warning shots before it stopped, the Indian statement said. The crew hid below deck and set the boat on fire.
India's vulnerability to militant attacks along its long coastline was exposed in 2008 after the seaborne assault by Pakistani gunmen on Mumbai, the nation's financial capital.
Ten Pakistani gunmen arrived on a rubber boat in Mumbai for the commando-style assault on two luxury hotels, a train station and a Jewish centre that killed 166 people.
Since the attack, India has upgraded coastal security, spending money on patrol vessels, helicopters and building a coastal radar network.
Clashes between India and Pakistan have risen of late in the disputed Himalayan territory of Kashmir. Indian border forces killed four Pakistani troops on New Year's Eve, ending a year in which hopes for reconciliation between the nuclear-armed neighbours faded.
"We will look to connect the dots after gathering more details," K.R. Nautiyal, deputy director general of operations at the Indian Coast Guard, said. "We will look at what was their design and what was their intention."
Ajai Sahni, executive director of Institute for Conflict Management in New Delhi, said it was too early to say whether the interception showed India had improved coastal security.
"We need to know precisely how this was done," Sahni told Reuters.
Fishermen are frequently arrested by both countries as the maritime border in the Arabian Sea is poorly defined and fishing boats often lack the technology to know their precise location.