Fathima, who suffered 40 per cent burns, succumbed to her injuries at Kozhikode Medical College last night, police said.
Taking a serious note of the case, state Home Minister Ramesh Chennithala urged Railway Minister Sadananda Gowda to take steps for installing advanced gadgets like Global Positioning System and CCTV cameras in trains for the safety of the passengers, especially women.
Terming the incident "unfortunate," Chennithala said the probe, being conducted by the Railway Police, was progressing.
Police said a 23-year-old man suspected to be involved was absconding after the incident, reportedly a sequel to a dispute over certain cash transactions between him and Fathima.
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She had run out of the compartment of the Kannur-Ernakulam Executive express screaming in pain when she was noticed by others trying to board the train early yesterday.
The man had allegedly set her on fire after emptying a liquor bottle on her and escaped after committing the crime.