The ship is listing and unconfirmed reports said it was sinking. A defence spokesperson said they are awaiting further details.
A dozen tankers are engaged in firefighting operations, officials said. An official said there was a dent in the warship due to the impact of the collision through which water had gushed into the vessel causing it to tilt to one side.
INS Vindhyagiri had collided with a Norwegian container vessel M V Nordlake, in the Mumbai harbour yesterday and was brought to the navy dockyard.