Union Home Ministry said that the bomb blast could be the handiwork of a terror group as the area is frequented by tourists specially foreign nationals.
Union Home Secretary GK Pillai said that it was most probably a terror attack adding that a team of National Investigative Agency (NIA) officials is being sent to Pune along with a Central Bureau of Investigation (CBI) forensic team.
"According to the state police and Intelligence Bureau a bomb blast took place at a bakery in Pune. An unattended package was spotted by one of the waiters at the bakery who tried to open the bag when it exploded. Till now eight people are confirmed dead," said Union Home Secretary GK Pillai in New Delhi
"Till the forensic investigations are not completed we cannot ascertain who is responsible (for the blast)," said Pillai.
Pillai also said that Lashkar-e-Toiba operative David Coleman Headley, who is under the custody of the Federal Bureau of Investigation in the United States of America, has surveyed the area including Osho Ashram.
Confirming Pillai's statement Special Secretary in the Union Home Ministry UK Bansal said it was indeed a terror attack.
"We did not have any prior information about any such attack. It's bound to be a terror attack," said Bansal.
Pune Police Joint Commissioner Sonawane, too, said that the explosion initially suspected to be a liquefied petroleum gas (LPG) cylinder blast, could be a bomb blast.
"It is a suspected bomb blast. However, it is still not confirmed," said Sonawane after confirming that eight people had died in the explosion.
At least 40 other people including four foreigners, too, were injured in the blast and were taken to the hospitals. The entire bakery was engulfed in flames and several fire tenders were rushed to the spot.
"We are verifying the nationality of the dead. The injured have been admitted to Sasoon, Jahangir and Inlack Budharani hospitals," said Sonawane.
Maharashtra Chief Minister Ashok Chavan said that the exact nature of blast is being investigated.
"Earlier it was known to be a cylinder blast but preliminary investigation shows that the cylinders are intact. The state Home Minister is at the spot. So far eight have died. It is too early to determine the nationality of the dead," said the Maharashtra Chief Minister.
Officials suspect the explosion to be a bomb blast because the bakery is close to a Jewish centre, Chabad House, in Koregaon area of Pune.
Maharashtra ATS officials have already arrived at the spot to help in the investigation.
The area, situated near the Osho Ashram, is very popular with both foreign tourists as well as residents of Pune.