The creation of the group called "Qaedat al-Jihad in the Indian Subcontinent" was announced by As Sahab, al-Qaeda's official media outlet, in a lengthy video posted on the social media outlets including You Tube.
The group, headed by senior Pakistani militant Asim Umar, would report to top Taliban leader Mullah Omar.
Al-Qaeda is active in Afghanistan and Pakistan, but the groups's leader Ayman al Zawahiri said "Qaedat al-Jihad" would take the fight to India, Myanmar and Bangladesh.
"A new branch of al-Qaeda was established and is Qaedat al-Jihad in the Indian Subcontinent, seeking to raise the flag of jihad, return the Islamic rule, and empowering the Shariah of Allah across the Indian subcontinent," Zawahiri said in the opening of the video, according to the translation by SITE Intelligence Group.
Zawahiri said the group will defend the "vulnerable in the Indian subcontinent, in Burma, Bangladesh, Assam, Gujarat, Ahmedabad, and Kashmir..." and "your brothers in Qaedat al-Jihad did not forget you and that they are doing what they can to rescue you from injustice, oppression, persecution, and suffering."
In the video, Zawahiri said the group was years in the making.
"This entity was not established today, but it is the fruit of a blessed effort for more than two years to gather the mujahideen in the Indian subcontinent into a single entity to be with the main group, Qaedat al-Jihad, from the soldiers of the Islamic Emirate and its triumphant emir, Allah permitting, Emir of the Believers Mullah Muhammad Omar Mujahid," he said.
"It is an entity that was formed to promulgate the call of the reviving imam Sheikh Osama bin Laden, may Allah have mercy on him, to call the Ummah to unite round the word of Tawhid [monotheism], to wage jihad against its enemies, to liberate its land, to restore its sovereignty, and to revive its Caliphate," Zawahiri said in the 55-minute video.
Al-Qaeda, which was founded by Osama bin Laden who was killed in Pakistan by US commandos in May 2011, has long claimed leadership of the jihadists fighting to restore a single caliphate.
In July 2013, al-Qaeda in another video had urged the Indian Muslims to join global jihad.