The two pilots managed to eject safely even as the plane crashed into the ground turning into a mangled mass of metal.
The IAF has initiated a court of inquiry into the matter.
According to the defence sources, the jet carrying two pilots was on a routine sortie and had taken off from Jodhpur station at 12 noon.
"Close to village Gopasar, some 70 km from Jodhpur, the engine of the plane caught fire due to some technical snag," an official source said.
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"The plane crashed in a open field after catching fire. The entire field was strewn with debris," said CO, Balesar, Ajeet Singh adding that no loss of life was reported.
According to the locals, the plane turned into a ball of fire in the sky and came shooting down towards the ground, wobbling a bit, before it crashed in the field with a bang.
IAF officials rushed to the spot and cordoned off the entire area, they said.