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The airline’s chairman Natarajan Chandrasekaran described the incident as a “tragic accident” and a “devastating event” and said emergency response teams were at the site.
A video of the crash, obtained by local media, showed the aircraft fly over a residential area before crashing, creating what appeared to be a large explosion.
Commons Leader Lucy Powell said the Government will provide “all the support that it can” to those affected by the incident.
Air India said the flight was departing from Ahmedabad airport with 242 people onboard the Boeing 787 Dreamliner aircraft.
The airline said 169 passengers are Indian nationals, 53 are British, one is Canadian and seven are Portuguese.
The Reuters news agency reported that 217 adults and 11 children were on board the flight.
In a statement, Mr Chandrasekaran said: “With profound sorrow I confirm that Air India Flight 171 operating Ahmedabad London Gatwick was involved in a tragic accident today.
“Our thoughts and deepest condolences are with the families and loved ones of all those affected by this devastating event.
“At this moment, our primary focus is on supporting all the affected people and their families.
“We are doing everything in our power to assist the emergency response teams at the site and to provide all necessary support and care to those impacted.”
He added: “An emergency centre has been activated and support team have been set up for families seeking information.”
Faiz Ahmed Kidwai, director general of India’s directorate of civil aviation, told the Associated Press the crash happened in the Meghani Nagar area at 1.38pm local time (9.08am BST).
Mr Kidwai said there were 232 passengers and 12 crew members onboard.
It is the first crash involving a Boeing 787 aircraft, according to the Aviation Safety Network database.
Flight tracking website Flightradar24 posted on social media platform X: “We are following reports of a crash of Air India flight #AI171 from Ahmedabad to London.
“We received the last signal from the aircraft at 08:08:51 UTC (shortly before 9.09am BST), just seconds after take off.
“The aircraft involved is a Boeing 787-8 Dreamliner with registration VT-ANB.”
It added that the signal from the aircraft was lost “less than a minute after take off”.
Air India was acquired by Tata Group from the Indian government in January 2022 after racking up billions of pounds of losses.
The airline’s UK operations are at Birmingham, Gatwick and Heathrow, with routes to a number of Indian cities such as Ahmedabad, Delhi, Mumbai and Bengaluru.
Recent analysis by the PA news agency found it was the worst airline for delays to flights from UK airports last year, with planes taking off by an average of more than 45 minutes later than scheduled.
The airline has gained a poor reputation for delays and cancellations in recent years, partly caused by a lack of funds to purchase spare aircraft parts, which led to some of its fleet being grounded.
The first flight of the Boeing 787 Dreamliner aircraft involved in the crash was in December 2013.
The plane was delivered to Air India during the following month.
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