The private ferry was on its way to the Elephanta Caves, a popular tourist destination, when it was hit by a speedboat.
“A Navy vessel undergoing engine testing lost control and collided with a passenger ferry,” the Navy said in a statement, adding that it regretted the “tragic loss.”
A passenger on board the vessel told ABP Majha news channel, “The speedboat hit our boat and water started entering our boat and it capsized. The driver asked us to put on our life jackets.”
“I swam for 15 minutes before another boat rescued me,” said the passenger, who did not want to be named.
Prime Minister Narendra Modi wrote: “Mumbai boat accident is heartbreaking. Condolences to the bereaved families. I pray for the speedy recovery of the injured.”