Dozens of employees managed to escape unhurt but firefighters spent two hours bringing the major blaze under control in Balaghat district of Madhya Pradesh state.
"It's unclear what caused the blast," local administrative chief Bharat Yadav told AFP from the accident site.
"Maybe there was some security or procedural lapse. We have launched an inquiry into the matter."
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Workplace accidents are common in India, where poor safety standards and lax enforcement of regulations have led to horrific deaths.
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Thirteen people were killed in April in a massive fire at a government-run fuel and grain depot in Madhya Pradesh. Later that month, five factory workers were burned to death in Jaipur after tons of molten rubber leaked at a tyre unit.
In February six workers were burnt alive at an air conditioning manufacturing plant in the southern city of Hyderabad.
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