The car went up in flames at Jyoti Talkies Square, one of the busiest crossings in Bhopal. The protesters were trying to stage a road blockade when the incident took place.
Fire tenders were rushed to the spot to douse the flames.
However, a major portion of the car was already burnt by the time the fire tender reached the spot.
Talking to PTI, Bhopal DIG Dharmendra Choudhary said: "A car caught fire during the protests. It is a matter of investigation whether the vehicle was torched or it caught fire."
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The road has been cleared, Choudhary said adding, "We are trying to know that who owns this car."
Another police officer claimed that the car belonged to one of the protesters.
Further investigation is on.