Two bombs placed on bicycles exploded in a crowded market-place in Hyderabad on Thursday, and Home Minister Sushilkumar Shinde said at least 11 people were killed and 50 wounded.
Hyderabad is a major IT centre in India, only second to Bangalore. Microsoft (MSFT.O) and Google (GOOG.O) have major centres in the city.
"Both blasts took place within a radius of 150 metres," Shinde told reporters, adding the explosives were placed on bicycles parked in the crowded marketplace. "Eight people died at one place, three at the other."
The explosions come less than two weeks after India hanged Afzal Guru for a militant attack on the parliament in 2001 that had sparked violent clashes.
Witnesses told Reuters they heard at least two explosions in the Dilsukh Nagar area of Hyderabad just after dusk but there could have been more.
TV showed debris and body parts strewn on the street in the area, a crowded neighbourhood of cinema halls, shops, restaurants and a fruit and vegetable market.
Prime Minister Manmohan Singh called it a "dastardly attack".
"I appeal to the public to remain calm and maintain peace," he said in a Twitter message.
In July 2011, three near-simultaneous blasts ripped through India's financial capital, Mumbai. At least 20 people were killed and over 100 wounded in the blasts set off by Muslim militants, authorities said.
Last year, four small explosions occurred in quick succession in a busy shopping area of Pune.