The 545-kg rocket, developed by space startup Skyroot, took off from the Indian space agency's launch site near Chennai and hit a peak altitude of 89.5 kilometers (km).

The rocket has the capability of reaching Mach 5 - five times the speed of sound - and carrying a payload of 83 kg to an altitude of 100 kilometers, the company said.

The Skyroot team had set a target of 80 km for its first launch, a benchmark some agencies define as the frontier of space.

The Karman line - set by an international aeronautics body as defining the boundary between the Earth's atmosphere and space - is at 100 km altitude.

Video footage showed the rocket taking off from the space centre, leaving a plume of smoke and fire in its trail.

Video footage showed the rocket taking off from the space centre, leaving a plume of smoke and fire in its trail.

It splashed down in the Bay of Bengal about 5 minutes after launch, officials said.

It splashed down in the Bay of Bengal about 5 minutes after launch, officials said.

"I'm happy to announce the successful completion of Mission Prarambh, the beginning," said Pawan Goenka, who chairs the Indian government agency that coordinates private-sector space activities.

Skyroot, which was started by Pawan Chandana and Bharath Daka, has set a target of cutting development costs by up to 90 percent versus existing platforms to launch small satellites.