"Nine civilians were killed in the coordinated suicide attack in the 3rd police district near the Indian consulate in Jalalabad at around 10 a.m. Saturday," the Nangarhar provincial government said in a statement. The three attackers were also killed.
The powerful blast sent a plume of grey smoke soaring into the sky, and damaged several houses and shops nearby.
Most of the casualties were children as the deafening blast took place near a mosque where dozens of children attended religious classes in the city, 120 km east of the Afghan capital Kabul, provincial police chief Sharifullah Amin said.
Afghan security forces quickly sealed off the blast site.
India had been previously the target of terror strikes. In October 2009, a Taliban suicide bomber attacked the Indian embassy in Kabul, killing at least 17 people. None of the Indian officials were injured in the attack.
In July 2008 a suicide bomber rammed a car full of explosives into the gates of the Indian embassy, killing 58 people, including senior Indian diplomat V. Venkateswara Rao and Brigadier Ravi Datt Mehta, while injuring over 150 people.
On Saturday, the provincial government said "the attackers tried to assault the consulate office. But the security forces were alerted about the attack on the compound".
"Following the arrival of the attackers, two militants got off a sedan and fired on security forces. But the third man detonated the explosive-packed car causing casualties," the statement said, adding the militants were killed in the blast.
One local security force member was also injured.
No damages were inflicted on the consulate, consulate sources said.
India was quick to assure that consulate officials were safe.
"Explosion in front of India's Consulate in Jalalabad. MEA in touch with officials. All officials are safe," tweeted Syed Akbaruddin, official spokesperson, India's ministry of external affairs in New Delhi.
No group has claimed responsibility for the attack.
Zabihullah Mujahid, a purported Taliban spokesman, told local media from undisclosed location via cell phone that the Taliban insurgents were not behind the attack.
Provincial Governor Gul Agha Shirzai and the country's interior ministry strongly condemned the attack.