The fire broke out at the factory in Jharkhand state late Sunday after an explosion.
"The unit was being run illegally and there was a huge stock of fireworks in preparation for Diwali," district police superintendent Prabhat Kumar told AFP.
"The fire started at 4:30 in the evening. Police and fire officials reached there soon. But intermittent explosions continued till midnight."
"Twelve workers were trapped out of which nine have died. Three of them were rescued and are being treated for injuries."
Authorities are investigating the incident but so far no arrests have been made.
Such accidents often occur ahead of Diwali, the annual festival of lights, which many celebrate by letting off fireworks.
In June, 25 workers died after an explosion at a firecracker factory in central Madhya Pradesh state, while a similar incident at a factory in Tamil Nadu last October left 20 workers dead.
Workplace accidents are common in India, where there are poor safety standards and lax enforcement of regulations.
