By Habib Beary
BBC correspondent in Bangalore
India has succesfully launched an indigenously developed rocket, GSLV-D2, from a launchpad off the Bay of Bengal.
Shortly after it lifted off, the 49-metre-long rocket launched a 1.8-tonne experimental communications satellite into space.
India wants to enter the commercial launch market
Officials at the Indian Space Research Organisation (Isro) say this is the heaviest satellite to be launched by an Indian rocket.
India now hopes to launch its own satellites and also enter the lucrative commercial satellite launch market.
Hundreds of scientists and engineers watching the launch from Isro headquarters in Bangalore cheered as the rocket took off.
"It is a great day for us, You have done us proud," Isro chairman Dr K Kasturirangan told the scientists.
In 2001, India launched its first geo-synchronous satellite launch vehicle, which carried a 1.5 ton satellite into space.
But that mission failed after the satellite went adrift of its designated slot in space.
GSLV is seen as an ideal rocket to launch two-tonne satellites which India can offer at a much lower price than the United States, Russia or France - which dominate the multi-billion dollar global market.
Overall length - 49 metres
Payload - 1.8 tonnes
Orbit -180 x 36,000 km
India has been using the European Ariane rocket to launch its communications satellites but plans to use its own rocket launch vehicle once GSLV becomes operational.
"Once commissioned, GSLV will make the Indian space programme a self-reliant one," said Dr Kasturirangan.
India hopes the GSLV will become operation by the end of this decade.
India has already established itself as a player in launching 100 kg remote sensing satellites through the indigenously developed Polar Satellite Launch Vehicle.
Isro has successfully launched micro satellites for South Korea, Germany and Belgium.
Space officials attach much significance to this launch after the failure of the first GSLV.
India is using Russian cryogenic technology to power the GSLV but efforts are on to test-launch the rocket using an indigenously-made cryogenic engine by 2005.
The development programme of GSLV, considered a major challenge for Indian space scientists, had been hit by US sanctions.
An embargo was first imposed in 1992 after Isro signed a deal with Russia for acquiring cryogenic engines and technology.
The Indian space agency was accused by the US of violating the Missile Technology Control Regime.
The Americans believed that Isro was helping Indian defence forces to power missiles, a charge denied by India.
The second ban was imposed after India's nuclear tests in 1998.
According to Dr Kasturirangan, the US has relaxed its ban on the import of dual use technologies and a "positive relationship is growing between the two countries in space co-operation".