India's domestic security agency issued a security alert to several states on Thursday after Al Qaeda leader Ayman Al Zawahri announced the formation of an Indian branch of his militant group, two television networks said.

Earlier, announcing the Indian wing, Al Zawahri said it would spread Islamic rule and "raise the flag of jihad" across the subcontinent.

In a 55-minute video posted online, Al Zawahri also renewed a longstanding vow of loyalty to Afghan Taliban leader Mullah Omar, in an apparent snub to the Islamic State armed group challenging Al Qaeda for leadership of transnational Islamist militancy.

Al Zawahri described the formation of "Al Qaeda in the Indian Subcontinent" as a glad tidings for Muslims "in Burma, Bangladesh, Assam, Gujarat, Ahmedabad, and Kashmir" and said the new wing would rescue Muslims there from injustice and oppression.

Counter-terrorism experts say Al Qaeda's ageing leaders are struggling to compete for recruits with Islamic State, which has galvanised young followers around the world by carving out tracts of territory across the Iraq-Syria border.

Islamic State leader Abu Abu Bakr Al-Baghdadi calls himself a "caliph" or head of state and has demanded the loyalty of all Muslims.

The group fell out with Al Zawahri in 2013 over its expansion into Syria, where Baghdadi's followers have carried out beheadings, crucifixions, and mass executions.

As well being an indirect repudiation of Islamic State, the announcement could pose a challenge to India's new Prime Minister, Narendra Modi. He has already faced criticism for remaining silent about several incidents deemed anti-Muslim, underscoring fears that his Hindu nationalist followers will upset religious relations in the majority Hindu nation.

However, while Al Qaeda is very much at home in the Afghanistan-Pakistan border area, due to influential contacts and a long presence there, it is a minnow compared to local militant groups in terms of manpower and regional knowledge.

The statement did not mention Islamic State or Baghdadi, but it appear to take a subtle dig at the group's efforts at administering areas it has seized in Iraq and Syria.

Islamic State's effort at state-building is something never attempted by Al Qaeda's central leaders, who traditionally have preferred to plot complex attacks on targets in the West.

Al Zawahri called for unity among militants and criticised "discord" - echoing a common Al Qaeda complaint against Islamic State's record of clashing with rival Islamist groups in Syria. - Reuters