The powerful explosion in Kaushambi district of Uttar Pradesh state caused the collapse of several nearby houses where most of the dead resided, according to local media reports.
The deceased children were between the ages of four and 13, the Hindustan Times newspaper reported. Police officer Satnarayan Prajapat confirmed the deaths, adding several others were injured in the explosion. It was not immediately clear what caused the blast.
Industrial accidents are common in India, often due to poor adherence to safety regulations and weak enforcement. In March, a fire at a fireworks factory in western India killed 17 people.
The following month, eight people were killed when a firecracker storage facility in southern India caught fire.The blast took place in Manori village of Kaushambi district, about 205 km south of Lucknow, the capital city of Uttar Pradesh.
Rescue efforts are underway, said Kaushambi district magistrate Amit Pal. Police suspect more people might be trapped underneath, and there are fears the death toll could increase.
Local television news channel NDTV, quoting officials, said more than 18 people are suspected to have been injured in the incident.
The explosion reportedly caused extensive damage to the factory and five to six nearby structures.
Local media reports said the explosion also disrupted train services on the Delhi-Howrah line for about an hour.