The boat upturned about two nautical miles from the sea shore.
As many as 40 school children were on board the boat.
The Coast Guard said it has has diverted ships which were at sea and ships are also sailing from Mumbai.
Local BJP MLA Manisha Choudhary claimed that the boat was ferrying around 40 children.
'Betrayed' Pakistan army chief won't ask for further USA aid
The Pakistani military said both Votel and an unnamed US senator phoned Bajwa to discuss security cooperation "over the week". It said Bajwa assured Votel that Pakistan will keep supporting all initiatives for peace in Afghanistan.
DySP and Local Magistrate had rushed to the scene and overseeing the rescue operations.
Rescue operations are now underway, and Coast Guard ships and helicopters have been diverted to the point of incident. The search for remaining missing students is ongoing. Helicopters from Daman, which is near Dahanu, have also been launched, a Coast Guard spokesperson said.
Around 25 students have been rescued, and search operation is on for the others, said Manjunath Singe, SP Palghar.