Around 30 labourers were on site at the factory in an industrial district outside the capital Dhaka when a blast tore through the six-storey building, causing its walls to collapse partially.
"It is a terrible scene. Fire brigade officers have arrived and are doing rescue work. The factory's boiler exploded and the blast also affected other buildings near the factory," police officer Harunur Rashid told AFP.
The factory is owned by textiles manufacturer Multifabs, which makes clothing for mostly European brands according to its website.
Al Amin, a worker at a nearby garment factory, said he was attending evening prayers at a mosque some 300 yards (metres) from the factory at around 7pm (1300 GMT) when the explosion shook the whole area.
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"I ran to the spot instantly and saw a huge smoke. I saw blood all over the bodies of some injured workers and instantly called the fire brigade," he told AFP.
According to factory director Mesba Faruqui, the main site was closed on Monday but a group of workers were overseeing maintenance of the boiler.
The industry is notorious for poor workplace safety, with many of the factories lacking basic equipment such as ventilation and air coolers.
In April 2013, the nine-storey Rana Plaza factory complex collapsed, killing more than 1,100 people in one of the world's worst industrial disasters.
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