The missile was destroyed by ground control while in flight when after less than half an hour it deviated from the planned flight path and veered toward the coast, Defense Research and Development Organization said in a release.
However, the government's DRDO said the missile, launched in the northeastern state of Odisha, "successfully" met the basic mission objectives and satisfactorily performed some of the maneuvers before termination.
"Nirbhay was successfully launched today at 11:50 a.m. from launch complex, Chandipur, Odisha, meeting the basic mission objectives successfully," DRDO spokesman Ravi Gupta said.
The two-stage missile, capable of being launched from land, sea and air, showed good loitering, control and guidance capabilities, Gupta said.
But ground control decided to destroy the rocket "to ensure coastal safety" after it veered off course.
No injuries were reported at seaside villages in the Jagatsinghpur district of Odisha where missile fragments fell in a cashew nut forest, NDTV reported.
"It was scary as the whole area was filled with smoke after the object crashed. Panic gripped the entire area as news about the incident spread," said Keshab Patra, a villager who saw the debris hit.
Nirbhay is being developed by the Aeronautical Development Establishment, a DRDO laboratory in Bangalore and is part of India's ambitious ongoing missile defense program.
Nirbhay -- meaning "fearless" -- was on a 600-mile programmed flight when problems happened, the DRDO said. After the missile had cruised for around 155 miles at an altitude of just less than 3 miles, it started drifting from its path, a report by The Hindu newspaper said.
The 1,000-ton, 19-foot long Nirbhay is a derivative of the Lakshya, a pilotless target aircraft, also developed by the Aeronautical Development Establishment.
If the mission had been successful, the missile would have taken up to an hour to cruise its entire range, The Hindu report said.
Other weapons in India's missile defense program include the long-range supersonic cruise missile BrahMos, the short-range surface-to-surface Prithvi ballistic missile, intermediate range surface-to-surface Agni missile, short range low-level surface-to-air Trishul missile and the third-generation, anti-tank Nag missile.
The Nirbhay failure comes after an unsuccessful launch in May of the medium-range surface-to-air Akash.
The flights of the Akash missiles were a routine post-induction test.
Around 3,000 of the 18-foot Akash missiles have been built by Bharat Dynamics and Bharat Electronics since production began in 2009. The missile is guided by a phased-array fire control radar called Rajendra, named after India's first president, Rajendra Prasad.
Defense experts have compared the Akash missile system to the MIM-104 Patriot surface-to-air missile manufactured by Raytheon in the United States.
Similar to the MIM-104, the Akash can attack aerial targets, including unmanned aerial vehicles, fighter jets, cruise missiles and air-to-surface missiles, the defense news Web site Defense Professionals said.