The navy statement said that they had seen the men on the ship's deck with rocket-propelled grenade launchers and guns. The pirates threatened to blow up the warship, and then opened fire.
The naval statement said: "On repeated calls, the vessel's threatening response was that she would blow up the naval warship. The INS Tabar retaliated in self defence and opened fire on the mother vessel.
"As a result of the firing by INS Tabar, fire broke out on the [Somali] vessel and explosions were heard, possibly due to exploding ammunition that was stored on the vessel."
India deployed the INS Tabar to escort Indian ships after the country's shipping firms said they were losing $450,000 a month on cost overruns and delays in meeting deadlines.
This would be the third attack the INS Tabar has fended off since it began its anti-piracy mission in the Gulf of Aden on Novermber 2.
Naval commandos flying in a helicopter foiled an attempt to hijack an Indian merchant ship on November 11.
The attack took place 285 nautical miles southwest off the Omani city of Salalah.