The Indian HAL Tejas, a combat aircraft used in the Indian Air Force, crashed on Friday afternoon after the pilot had flown across the site of the biennial air show in Dubai several times.
The plane appeared to lose control and dive directly towards the ground just before crashing inside the grounds of the airfield.
The Indian Air Force confirmed the crash and said "the pilot sustained fatal injuries in the accident".
"IAF deeply regrets the loss of life and stands firmly with the bereaved family in this time of grief," it said, adding that "a court of inquiry is being constituted, to ascertain the cause of the accident".
Black smoke rose over the Al Maktoum International Airport at Dubai World Central as a crowd of spectators watched, and sirens sounded after the crash.
Dubai police and airport officials offered no immediate comment.
The city-state's second airport was hosting the biennial Dubai Air Show, which has seen major aircraft orders by both the long-haul carrier Emirates and its lower-cost sister airline FlyDubai.
Tejas is India's indigenous fighter aircraft, built by state-run Hindustan Aeronautics Limited.
The lightweight, single-engine jet is expected to bolster India's depleted fighter fleet as China expands its military presence in South Asia, including by strengthening defence ties with India's rival Pakistan.
In September, India's defence ministry signed a contract with Hindustan Aeronautics Limited, or HAL, to procure 97 Tejas jets for the air force.
Deliveries are expected to begin in 2027.
The Indian government also signed a deal with HAL in 2021 for 83 Tejas aircraft.
Deliveries, expected in 2024, have been delayed largely because of shortages of engines that must be imported from the United States.