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The IJT S-3466, which was earlier reported as an Advanced Jet Trainer, was on routine flight testing when the mishap occurred in the afternoon, Hindustan Aeronautics Limited said in Bangalore.
The aircraft crashed in a sparsely populated area at Lakshmipuram, preventing any collateral casualties, police said.
An IAF helicopter flew the pilots back to Bangalore, they said.
A court of enquiry has been constituted into the crash, HAL said.