India has launched an Israeli-built spy satellite to boost its surveillance capabilities after last year's Mumbai attacks exposed glaring holes in its defence apparatus.

The satellite, RISAT 2, was launched from the Sriharikota launch site, 90km north of the southern city of Chennai, on Monday.

"The launch was perfect and the satellite is in orbit," a spokesman for the Indian Space Research Organisation (ISRO) said.

Monday's launch demonstrated the growing defence ties between India and Israel.

In 2007, Israel replaced France as the second-largest arms supplier to India after Russia.

The new satellite provides India with the capability to monitor its international borders, anticipate any troop build-up or infiltration attempts by armed groups and track incoming ballistic missiles, defence officials said.

Last year, an Israeli satellite launched from an Indian base sparked a controversy as Iran claimed the satellite would be used to take images of Iran. But both India and Israel denied this.