All Indians inside the embassy are safe and accounted for.
"The blast occurred at 8.27 Kabul time. All the personnel inside the embassy at the time of the blast are safe. Three of our personnel from the ITBP, who were guarding the perimeter wall of the embassy, have been slightly injured from the shrapnel from the bomb blast but there has been no loss of life," Foreign Secretary Nirupama Rao said.
"The blast was directed at the embassy because the suicide bomber came up to the outside perimeter wall of the Indian embassy with a car loaded with explosives, obviously with the aim of targeting the embassy," she said, when asked if the attack was aimed towards the Indian mission.
Rao said she had already spoken to Ambassador Jayant Prasad, who has informed her that all the members of the embassy are safe.
She said the intensity of the blast was "more or less the same" as the July 2008 attack on the mission in which four Indians, including a senior IFS officer and a Brigadier Rank defence attache, were killed. A suicide car bomber had last year rammed the front wall of the Indian Embassy, killing 41 people and wounding 147 in one of the deadliest attacks in the Afghan capital.
This is the fourth attack since August in Kabul and the second attack on the Indian Embassy in a year. India is a big target because of its large presence in Afghanistan. Post-Taliban, New Delhi has pledged over $1.26 billion in aid to war-ravaged Afghanistan, making India the fifth largest donor nation to the country after the US, Britain, Japan and Canada.
Officials say a suicide attacker was involved in Thursday's blast. There are reports of UN vehicles in the area being damaged.
Witnesses said they saw a plume of smoke rising from the site of blast outside the embassy, which is situated close to Afghan Interior Ministry office and other major government buildings and a busy shopping district.