The vehicle, which carried over 50 passengers, was travelling between the cities of Jaisalmer and Jodhpur when the incident occurred.
"Nineteen passengers died in the bus and one succumbed to burn injuries on the way to Jodhpur," senior police officer Rajesh Meena told AFP.
The Press Trust of India news agency - which also confirmed the toll, citing a local lawmaker - reported that the bus stopped on the highway after smoke emerged from the back of the vehicle.
The incident occurred shortly after the bus departed from Jaisalmer at around 3pm local time, according to reports.
MNA/
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