Twelve sleeping workers have been killed after an overnight fire at a snack shop in Mumbai.

One survivor, 28-year-old Tushar Pawar, said he saw the blaze taking hold of the centre of the workshop area at about 4am.

"Those who were outside were able to move out, but those who were inside, they were trapped and could not come out," he said.

A disaster management official told the Press Trust of India news agency that 12 workers succumbed to the intense heat and smoke.

They were taken to a hospital, but declared dead on arrival.

Investigators are trying to determine the cause of the fire, which gutted the workshop area and the shop itself.

It made farsan, a salty fried snack usually enjoyed with tea.