The Boeing 787-8 Dreamliner, with 242 people on board, was headed for Gatwick Airport, south of the British capital and crashed onto a medical college hostel during lunch hour.
At least one passenger is known to have survived, police said, and the man told Indian media how he had heard a loud noise shortly after Flight AI171 took off.
"We are still verifying the number of dead, including those killed in the building where the plane crashed," Vidhi Chaudhary, a top state police officer, told Reuters.
She said the death toll was more than 240, revising down a previous toll of 294 as it included body parts that had been double counted. It was not immediately clear how many of the dead had been on the aircraft or on the ground.
The known surviving passenger was in seat 11A, next to an emergency exit, Chaudhary said, adding that there could be more survivors in hospital.
"Thirty seconds after take-off, there was a loud noise and then the plane crashed," 40-year-old Ramesh Viswashkumar told the Hindustan Times, which showed a boarding pass for seat 11A in that name online.
"It all happened so quickly," he told the paper from his hospital bed.
"When I got up, there were bodies all around me. I was scared. I stood up and ran. There were pieces of the plane all around me," he said. "Someone grabbed hold of me and put me in an ambulance and brought me to the hospital."
He said that his brother, Ajay, was seated in a different row on the plane. "He was travelling with me and I can’t find him anymore. Please help me find him,” he said.
Ahmedabad police chief G.S. Malik said the bodies recovered could include both passengers and people killed on the ground. The dead included Vijay Rupani, the former chief minister of Gujarat state, of which Ahmedabad is the main city.
Relatives have been asked to give DNA samples to identify the dead, state health secretary Dhananjay Dwivedi said.
Parts of the plane's body were scattered around the smouldering building into which it crashed. The tail of the plane was stuck on top of the building.
The passengers included 217 adults, 11 children and two infants, a source told Reuters. Air India said 169 were Indian nationals, 53 were Britons, seven Portuguese, and one Canadian.
It was the first crash for the Dreamliner, which began flying commercially in 2011, according to the Aviation Safety Network database. The plane that crashed on Thursday flew for the first time in 2013 and was delivered to Air India in January 2014, Flightradar24 said.
CCTV footage showed the plane taking off over a residential area and then disappearing from the screen before a huge fireball could be seen rising into the sky from beyond the houses.
"My sister-in-law was going to London. Within an hour, I got news that the plane had crashed," Poonam Patel, a relative of one of the passengers, told news agency ANI at the government hospital in Ahmedabad.
Ramila, the mother of a student at the medical college, told ANI her son had gone to the hostel for his lunch break when the plane crashed. "My son is safe, and I have spoken to him. He jumped from the second floor, so he suffered some injuries," she said.
According to air traffic control at Ahmedabad Airport, the aircraft departed at 1:39 pm. It gave a Mayday call, signalling an emergency, but thereafter there was no response from the aircraft.
US aerospace safety consultant Anthony Brickhouse said one problematic sign from videos of the aircraft was that the landing gear was down at a phase of flight when it would typically be up.
“If you didn't know what was happening, you would think that plane was on approach to a runway,” Brickhouse said.
India's Civil Aviation minister Ram Mohan Naidu said that a formal investigation has been initiated by the Aircraft Accident Investigation Bureau.
"The government is constituting a high-level committee comprising experts from multiple disciplines to examine the matter in detail," he added.
Boeing CEO Kelly Ortberg said that he has spoken with the Air India chairman to offer full support and a team stands ready to support the investigation. The airline CEO, Campbell Wilson, said the investigation would take time and expressed "deep sorrow" about the incident.
Boeing's shares fell 5% as the crash posed a major setback for the planemaker as its new CEO looks to rebuild trust following a series of safety and production challenges.
Aircraft engine-maker GE Aerospace said that it would put a team together to go to India and analyse cockpit data, India's CNBC TV18 reported.
The US transportation secretary said the Federal Aviation Administration was working with Boeing and GE in the investigation.
Britain was also working with Indian authorities to establish the facts around the crash and to provide support to those involved, the country's foreign office said.
"The tragedy in Ahmedabad has stunned and saddened us," Indian Prime Minister Narendra Modi posted on X. "It is heartbreaking beyond words." Gujarat is Modi's home state.
British Prime Minister Keir Starmer said images of the crash were "devastating". A Buckingham Palace spokesperson said King Charles was also being kept updated.
US President Donald Trump called the crash "terrible".
Ahmedabad Airport, which suspended all flight operations after the crash, said it was operational again but with limited flights. The airport is operated by India's Adani Group conglomerate.
The last fatal plane crash in India, the world's third largest aviation market and its fastest growing, was in 2020 and involved Air India Express, the airline's low-cost arm.
The airline's Boeing-737 overshot a "table-top" runway in southern India, skidded and plunged into a valley, crashing nose-first into the ground and killing 21 people.
The formerly state-owned Air India was taken over by Indian conglomerate Tata Group in 2022, and merged with Vistara - a joint venture between the group and Singapore Airlines – in 2024. ($1 = 85.5420 Indian rupees)
