According to reports, the fire broke out from a fireworks factory, in U - Kothapalli village in the East Godavari district, just two days before the festival of Diwali.
Seven of the injured persons were shifted to Kakinada hospital, about 160 km from the port city of Visakhapatnam.
The mishap took place in a building in Vakatippa village in the coastal district. Firecrackers were being manufactured illegally in the building, police said.
Two fire engines have reached the spot to douse the flames, as huge flames engulfed the premises.
Rescue workers took the injured to nearby hospitals.
Officials said the toll may go up, as at least 20 people were working in the unit at the time of the explosion.
The exact cause of the fire is yet to be ascertained, although blast is also suspected to be behind the fire.