The rocket blasted off from the Satish Dhawan space port, 100km north of Madras on Thursday.
"It was a fantastically accurate flight and [satellite] injection," G Madhavan Nair, chairman of the Bangalore-based Indian Space Research Organisation, said.
The launch "reaffirms the emergence of India as a major space power", Prime Minister Manmohan Singh told parliament in New Delhi.
The 44m Polar Satellite Launch Vehicle carried a remote sensing satellite whose detailed imaging is aimed at putting every Indian household on the map.
The vehicle also carried another satellite for South Asian home radio operators that can be used during disasters such as earthquakes and floods.
The biggest satellite, the 1.5-tonne Cartosat-1, will supply high-resolution pictures for more precise maps for planning towns, laying new roads, digging canals, disaster assessment and water resources management.
Among Cartosat's special features are two cameras that will provide stereo pictures to generate three-dimensional maps. Until now, Indian mapmakers have relied on combining satellite data to create three dimensional maps.
"[The launch] reaffirms the emergence of India as a major space power"
Indian prime minister
The cameras are designed to read images smaller than a car by identifying features down to 2.5m wide.
The smaller 42.5-kg Hamsat communications satellite will provide ultra-high and very-high radio frequencies to broaden bandwidth that Indian home operators have been seeking for years.
India has grabbed headlines with its commitment to send a probe to the moon in two or three years. But its space programme mainly has been aimed at harnessing high technology for its population of more than one billion, particularly its rural masses.
Thursday's blast-off was the second since September, when India launched Edusat, a distance learning satellite to allow teachers to broadcast primary and secondary classes to remote regions via television.