This is the 14th mishap involving a naval vessel in the last 10 months, including INS Sindhurakshak submarine which sank at the Mumbai harbour on August 18, last year, killing 18 personnel on board.
The fire broke out onboard Matanga, an ocean-going tug capable to towing two large vessels out of the harbour, during welding on the ship, Navy officials said.
Fire tenders were rushed to douse the flames and the extent of damage caused to the ship was being assessed, they said.