The microlight plane crashed soon taking off for a routine sortie from Johrat airbase in Assam state.
An Indian air force official said the pilots attempted an emergency landing but the plane crashed and burst into flames.
"Both the pilots died in the crash and a court of enquiry has been ordered," the official told.
It was not immediately clear what caused the two-seater to crash, but accidents are not uncommon.
More than 170 indian air force pilots have lost their lives in accidents in the past three decades, with crashes blamed on its ageing fleet.
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Most of the accidents involve Soviet-era MIGs unflatteringly dubbed "flying coffins". Last May two air force pilots were killed in Assam after their Russian-made fighter jet crashed near the border with China.
India is investing billions of dollars to modernise its its decades-old fleet.
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