Sony also unveiled next version of Smartwatch for Rs 14,990 which will be available in India from October.
"We want to be No 1 in premium smartphone segment which are phones priced above Rs 30,000 and double our market share from about 10 percent at present to 20 percent by end of financial year 2014. Therefore we have to double our speed of innovation and here we are with Xperia Z1," Sony India Managing Director Kenichiro Hibi said here.
Xperia Z1 is available across stores from today with an installment option spread over 12 months at no cash down payment, nil processing fee and interest, he said.
The company unveiled next version of smartwatch for Rs 14,990 which will be available in India from October.
The launches of smart devices from Japanese major comes a day after Korean technology giant Samsung unveiled its high-end and highest priced smartphone Galaxy Note 3 for Rs 49,900 and its first smartwatch Galaxy Gear for Rs 22,990 in India.
Xperia Z1 is also the costliest smartphone offering from Sony's stable in India. Sony has introduced 20.7 mega pixel camera in this phone which is next to Nokia's Pureview 808 that was launched in the country last year.
"I like the 20 megapixel plus camera in the phone which does away need to carry a separate camera. Also you can store many songs in the phone," Brand Ambassador and bollywood actress Katrina Kaif said.
The company has incorporated 2.2 Quad core processor in phone which is close to speed of processor available for laptops and desktop PCs.
Xperia Z1 has 2GB RAM and internal storage of 16 GB which can be expanded to additional 64 GB through memory card.
"We plan to increase exclusive Xperia stores from 30 at present to 200 by end of financial year 2013. Sony will also double its sales counter reach to 8,000 by end of this fiscal ending March," Hibi said.
As part of promotional offer Xperia Z1 buyer will get free portable USB charger worth Rs 2,790, 8GB internet usage from Vodafone for 2 months and accidental insurance cover for six months from date of purchase.
Sony has tied up with movie retailers BigFlix to offer three months free subscription to Xperia Z1 buyers.
The company on the occasion also launched two lens style Cybershot camera,  DSC-QX-100 for Rs 24,990 and DSC-QX10 for Rs 12,990, and a wireless bluetooth speaker for Rs 16,990 among others.