India has test-fired a medium-range version of its most powerful nuclear-capable missile on the eve of the second anniversary of the terror attacks on Mumbai, the country’s financial capital.

The Agni-I missile, which has a range of 700km, was fired successfully from an island off the coast of Orissa in eastern India at a target in the Bay of Bengal, India’s defence ministry said on Thursday. The 12-tonne missile, which was indigenously developed, is part of an arsenal intended as a deterrent towards Pakistan and China, its nuclear-armed neighbours.

Senior Indian officials regard Beijing’s grip on Islamabad as firmer than on neighbouring Burma’s military rulers, and the country’s security establishment is increasingly worried about China’s military build-up.