The blast on Friday afternoon in Virudhunagar district was one of the worst such incidents in years in the southern state of Tamil Nadu.
Local official R Kannan told AFP that the death toll was likely to go up in the next few hours.
"So far 34 people have been injured and are undergoing treatment. Some of them are severely burnt," he said.
Kannan said there were around 74 people in the factory at the time of the incident.
According to media reports, the factory was being run illegally. News portal The Newsminute said the owner was missing and that the police were still investigating the cause of the accident.
Indian Prime Minister Narendra Modi announced compensation of 200,000 rupees ($2,700) to the families of the deceased.