One woman died and two people were injured late Sunday when a crude bomb exploded outside a restaurant in the southern Indian city of Bangalore, police said.
The blast outside a popular eatery in the upscale Church Road area of India's technology hub came weeks after the national government warned major cities to be on alert.
Bangalore police commissioner M.N. Reddi said the 38-year-old victim had suffered head injuries in the blast and later died in hospital.
"Another two injured persons are still being treated at the same local hospital," he told reporters.
No one has claimed responsibility for the attack, but two people who were detained nearby are being questioned.
Police say the improvised explosive device was triggered by a timer. They have asked city's top businesses and shopping malls to be extra vigilant during new year celebrations.
"We have stepped up our vigil and intensified patrolling across the city to prevent further incidents in view of the New Year's Eve festivities," Reddi said.
India has made efforts to improve domestic security since the 2008 Mumbai attacks, in which 10 Islamist gunmen laid siege to the city, killing 166 people.
But experts say security forces still suffer from weak grassroots intelligence gathering.
Sunday's blast came weeks after Indian police arrested a Bangalore executive accused of being behind a Twitter account that published jihadist propaganda and information for would-be recruits to the Islamic State group in Syria and Iraq.
Mehdi Masroor Biswas's account, @ShamiWitness, had around 18,000 followers at the time but has since been deactivated.
Security experts have warned that Bangalore has increasingly become vulnerable to attacks with a number of groups with militant ties believed to have based themselves in the city.
A 2013 bomb blast in the city wounded 16 people, including 11 policemen, ahead of state elections. No group has claimed responsibility for that attack.
"We had already issued a general nationwide alert on December 18, warning big cities like Delhi, Mumbai and Bangalore to be extra-vigilant," said a home ministry spokesman who asked not to be named.
"We haven't issued any fresh alerts or warnings after the Sunday blast."