The rocket that was meant to be launched today, the Geosynchronous Satellite Launch Vehicle (GSLV), was to put into orbit a new communications satellite.
The cryogenic engine of the rocket had been made in India.
ISRO chairman K Radhakrishnan said a new date for the launch has not been set yet. "Some problem was observed in the second stage fuel chamber and a revised timeline will be announced" he said.
The rocket has cost the country Rs. 160 crore, and the satellite's price tag is Rs. 45 crore. So the mission costs over Rs. 200 crore.
In 2010, there were two massive setbacks for the GSLV programme. The first flight of a rocket with an Indian-made cryogenic engine failed as a crucial pump jammed. Then, on Christmas Day the same year, the rocket was destroyed in mid-air.
The ISRO chairman had said recently that lessons have been learnt from the 2010 twin disasters and that 'minor modifications and extensive ground testing' have been conducted.
The GSLV is a three stage/engine rocket. The first stage is fired with solid fuel, the second with liquid fuel and the third is the cryogenic engine.
The GSLV weighs 415 tonnes - as much as 80 adult elephants. It is 50 metres high - as tall as a 17-storey building.
After the lift-off from Sriharikota in Andhra Pradesh, about 80 kilometres north of Chennai, the GSLV was expected to take a 17-minute flight to put the satellite into its designated orbit above Earth.
India has been trying to push further into the global market for launching commercial satellites.