15 people were killed on the spot while two workers succumbed to their injuries on Sunday in a hospital in Indore.
Two injured victims are recuperating in the hospital.
Three children were among those killed.
Sameer, 14, an eyewitness, told NDTV, "I had gone to the factory to give the lunch box to my grandmother who worked there. As soon as I handed her the lunch box and stepped out of the factory, there was a powerful explosion. It was so strong that it blew the roof of the factory away; there was smoke all around. In the explosion, I lost my grandmother."
Nafisa Bi, who suffered 35 percent burns in the incident, is currently recuperating in a hospital in Indore.
"I was working in the factory when I heard the explosion. I ran towards the forest; my clothes were on fire. People came to my help," she recalls.
The state government has announced a compensation of Rs 50,000 for the injured and Rs 1.5 lakh for the families of the deceased.
The administration has ordered a magisterial probe into the matter.
The cause of the explosion is yet to be ascertained.
Anurag, Superintendent of Police of Ujjain District, told media personnel, "We have arrested the factory owner Yusuf. We have registered an FIR against him and have also named his brother Shabbir in it. It seems that in the factory, the amount of explosive stored was much more than permitted on the license. We are waiting for the report by the investigating teams."
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