The two-stage Agni-IV blasted off from the eastern state of Orissa in the third test for the missile, which was first launched in 2010 in a flight marred by technical problems. Its second test last November was declared a success.
"The Agni-IV was tested for its full range of 4,000 kilometres (2,480 miles) and it was a success," Defence Research and Development Organisation (DRDO) spokesman Ravi Gupta told AFP on Wednesday.
Pakistan, which has fought three wars with arch-rival India since their 1947 independence, test-fired a nuclear-capable cruise missile on Monday with "stealth features".
DRDO spokesman Gupta insisted India's test was not "country-specific".
"None of our missiles are country-specific. We are a peaceful nation which has never attacked any country in thousands of years," the DRDO spokesman added.
India unveiled its 5,000-kilometre range Agni-V in April, which was seen as a massive boost to its regional power aspirations and one that narrows -- albeit slightly -- the huge gap with China's missile systems.
The Agni-V left India knocking at the door of a select club of nations with inter-continental ballistic missiles (ICBMs), which have a minimum range of 5,500 kilometres.
Currently, only the five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States -- possess a declared ICBM capability.
China and India fought a brief but bloody war in 1962 over a border dispute that remains unresolved despite several rounds of talks between Asia's two most powerful military nations.
Agni, which means "fire" in Sanskrit, is the name given to a series of rockets the DRDO developed as part of its ambitious integrated guided missile development project launched in 1983.
While the shorter-range Agnis I and II were mainly developed with traditional rival Pakistan in mind, later versions with longer range reflect the shift in India's focus towards China.