The explosion took place at a residential area in North 24 Parganas district on Sunday, Republic World reported citing preliminary information released by Republic Bangla states.
While police have recovered five bodies from the site, two others are said to have died at a hospital.
The blast has taken place in a residential area. The house from where the factory was being operated was left in shambles following the explosion.
Rescue operations are underway as authorities believe some people might still be trapped under debris.
Multiple explosions at illegal firecracker units have been reported recently. In May, at least 11 people died in an explosion in the East Midnapore district.
AMK/PR