Indian navy reels after submarine disaster in Mumbai An explosion and fire hit the INS Sindhurakshak early Wednesday "Eighteen brave sailors are feared to have lost their lives," the prime minister says The submarine recently underwent an extensive refit at a Russian shipyard The disaster is a setback to India's aging submarine fleet New Delhi (CNN) -- The Indian navy suffered its worst peacetime disaster this week when an explosion and fire sank a submarine with 18 sailors on board in a Mumbai dockyard. Divers have entered the vessel's sunken hulk, but have so far been unable to locate those trapped inside. Navy officials, meanwhile, are trying to figure out what went wrong on the INS Sindhurakshak, a submarine that had only recently returned from an extensive refitting in Russia. They are also facing the challenge of patrolling India's vast coastline with an aging, and now depleted, submarine fleet. The sinking of the submarine is "an unprecedented setback to the national effort to strengthen undersea defense capabilities," The Hindu, a daily newspaper, said in an editorial Thursday. The disaster struck at a particularly unfortunate time for Indian authorities, as Prime Minister Manmohan Singh acknowledged in a speech Thursday to mark the 66th anniversary of India's independence from Britain. India unveils home-built aircraft carrier "The accident is all the more painful because the navy had recently achieved two major successes in the form of its first nuclear submarine, INS Arihant, and the aircraft carrier, INS Vikrant," he said. "Eighteen brave sailors are feared to have lost their lives," Singh said. The Indian navy had last week activated the reactor on the Arihant, its first domestically built nuclear submarine. And on Monday, it launched the Vikrant, a home-built aircraft carrier. In a country where the military has long relied heavily on Russian military hardware, Singh and other officials had hailed both events as big steps forward for India's technological capabilities. But the explosion and fire aboard the Sindhurakshak brought the moment of national pride to an abrupt end. Navy officials have ordered an investigation into what set off the blast. At a news conference Wednesday, Indian navy chief D.K. Joshi struggled to come up with possible theories about the cause, noting that the recently refurbished submarine had received "highly satisfactory gradings" in an inspection last month. "We are at this point in time unable to put our finger on what could have actually gone wrong," he said. The Sindhurakshak was one of 10 Kilo-class diesel-electric submarines supplied to the Indian navy by the Russian defense contractor Rosvooruzhenie. The navy also has four smaller German-built diesel electric submarines, and one nuclear-powered submarine leased from Russia last year. According to the navy, the 10 Kilo-class vessels have "a displacement of 3,000 tonnes, a maximum diving depth of 300 meters, top speed of 18 knots, and are able to operate solo for 45 days with a crew of 53." Commissioned between 1986 and 2000, some of them are also getting on a bit. The Sindhurakshak was commissioned in 1997. But after its recent refit, from which it only returned in April, it "was probably the most modern submarine" in the navy's inventory, said Rahul Bedi, India correspondent for IHS Jane's Defence Weekly. The redesign included the installation of new missile, communication and cooling systems, as well as a new radar, Russian state news agency Itar Tass reported. The upgrade also included other measures to improve the submarine's combat quality and operational safety, the agency said. With the Sindhurakshak now apparently a write off, the navy will have to make do with the 14 submarines it has left. That falls well short of its desired level of 24, according to Bedi. And four or five of the remaining vessels are due for retirement because of their age. "They're being kept alive by various means," Bedi said. They're in the ICU, as it were. Reinforcements, meanwhile, appear to be a long way off. Plans to modernize the fleet have been delayed by about five or six years because of "technical problems, bureaucratic wrangling and cost overruns," Bedi said. A series of corruption scandals in recent months, including in a new submarine project, have paralyzed government decision-making about expensive investments, he said. The delays are holding back the Indian navy's efforts to counter China's increasing maritime strength in Asia. The navy wants to play a more assertive role throughout the Indian Ocean, a crucial zone for world trade, and farther afield, according to Bedi. CNN's Harmeet Shah Singh reported from New Delhi, and Jethro Mullen reported and wrote from Hong Kong. CNN's Mallika Kapur in Mumbai contributed to this report.