The Indian Air Force jet took off from the central city of Gwalior at 11:30 am (0600 GMT) but within minutes developed unspecified problems, airforce spokesman Squadron Leadar Mahesh Upasani said.
He said the trainer version of the Mirage-2000 was participating with F-16 fighter jets of the Singapore Air Force when it crashed four kilometresmiles) short of the airfield in Gwalior and exploded in flames.
The two pilots on board ejected to safety and the Mirage crashed.
"There were no casualties on the ground," the official said, adding the accident would not disrupt the ongoing exercises, coded "Operation Goad."
Other officials said Singapore has sent six F-16s while the Indian air force was using aircraft of British, French and Russian origins in the joint exercises, which began at the weekend.
"The exercises slated until October 27 are aimed at testing the maneuverability of the US-built F-16s with some of the planes in our inventory and hence just one accident will not disrupt the programme," one Indian airforce officer said.
Tuesday's crash is the second involving a Mirage-2000 in India in less than a month.
On September 23 the Gwalior airbase lost a Mirage-2000 when the multi-role jet crashed into a sparsely populated region near the city.
The aircraft lost its nosewheel in midflight and the pilot ejected safely.
The Indian Air Force has been plagued by crashes of its ageing fleet, although accidents of Mirages have been rare.
Four British-designed Jaguars of the Indian Air Force crashed in quick succession earlier this year, killing three pilots including one whose parachute failed to open.