India has been successfully developing its space program in recent years, regularly launching satellites using its own booster rockets.
"Our target [for the first launch] is before 2010," the Press Trust of India news agency quoted Chairman of Indian Space Research Organization (ISRO) Madhavan Nair as saying.
Indian scientists have already designed a prototype of the space shuttle to measure parameters of the vehicle and determine future work on the project, the official said.
"The launch vehicle will use a rocket to boost it up to Mach 5 or so," Nair said, adding that air-breathing modules could be integrated into the reusable delivery vehicle.
The news agency said the ISRO is also focusing its attention on an unmanned mission to Mars to study chemical attributes of the Martian atmosphere, and the planet's sub-soil and terrain. The mission could take place as early as in 2012.
India earlier announced plans to launch 15 telecommunications satellites and 8-10 earth remote sensing satellites by March 2012, when the 11th five-year plan has been completed.