The blasts that hit the city in Andhra Pradesh were 10 minutes apart, police said. Television images showed casualties being rushed to hospital.
India’s home minister said bombs had been planted on bicycles 150m (500ft) apart near a crowded fruit market.
Major cities have been put on alert as police probe the cause for the blasts.
“The number of dead has increased to 12 and the injured are 57,” home secretary RK Singh said after a high-level security meeting following the attacks.
Unconfirmed reports suggest the number of casualties may rise.
The explosions hit just after 19:00 within a radius of 150m, home minister Sushil Shinde said. There was a possible third blast reported shortly afterwards, said Hyderabad police.
No group has so far said it carried out the attack.
Authorities had received intelligence about possible attacks in the country but no specific information as to where or when they might occur, Sushil Shinde said.
The information had been passed on to the states, he added.
PM Manmohan Singh has urged the public to remain calm.
“The guilty will not go unpunished,” he tweeted.
He has directed federal agencies to extend all possible help to the state authorities in the relief effort, and offered 200,000 rupees to the next of kin of each person killed.
Meanwhile, Australia’s cricket team says it has held talks about its players’ safety with Indian authorities in the wake of the deadly twin bombings. The second Test of the India-Australia series is due to start in Hyderabad on March 2.
“The safety of the squad is of paramount importance and Australian team management and Cricket Australia staff are liaising with the Board of Control for Cricket in India, local authorities and the Australian High Commission to ensure we have all the appropriate information,” the team said in a statement on Thursday.
Mumbai and the rest of Maharashtra state have been put on high alert following the blasts, with measures such as increased police presence on the streets and random vehicle searches.
It is the first major bomb attack in India since a September 2011 blast outside Delhi’s High Court killed 13 people.
The Muslim extremist group Harkat-ul Jihad al-Islami (Huji) said it carried out the Delhi attack.
Hyderabad is one of southern India’s main commercial hubs.
The explosions hit the busy Dilsukh Nagar neighborhood, which is crowded with cinemas, shops, restaurants and one of India’s largest fruit and vegetable markets.
There have been at least nine attacks on the city since 1992, including twin explosions in 2007 that killed more than 40 people.
The city has a sizeable Muslim minority, is a stronghold of the Muslim political party, MIM, and has a long history of religious tension.
Religious tensions grew from the 1980s and 1990s with Hindus and Muslims moving out of mixed areas into community ghettos.
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