Media reports of the number of casualties vary, with India Today reporting eight deaths and the Hindustan Times reporting six.
The blast took place at an under-construction plant of Ank Pharma in Boisar, an industrial city about 60 miles from Mumbai, in the state of Maharashtra.
The blast took place during chemical testing at the factory.
Police said the explosion could be heard within a 9-mile radius and shattered window panes in nearby houses.
The explosion also started a fire in the area, which officials said was extinguished.
Officials also reported several injuries, though the exact number of people hurt in the blast was unclear.
Maharashtra's chief minister announced the families of the deceased would each receive $7,046 in financial assistance.
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