The factory was located in the district of Singrauli, more than 750 kilometres (465 miles) from the state capital Bhopal.
"Ten people are dead. Nine were recovered and one died in hospital," said Singrauli police superintendent Anurag, who goes by one name.
He said rescue operations were still under way but no other bodies had been recovered from the rubble.
The blast was so powerful that vibrations were felt in nearby towns, and power lines were immediately cut.
The cause of the explosion has yet to be determined.
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