The incident took place yesterday at New Jaya Nepal Brick Factory in Nepal's Itahari city, police said.
Five Indian nationals killed in the incident were from West Bengal and Bihar.
Of the 25 injured, condition of four is said to be critical. They are receiving treatment at BP Koirala Institute of Health Sciences in Dharan, Kathmandu Post reported.
Around one million raw bricks were being baked when the explosion took place as smoke could not pass out of the 105-foot chimney, resulting in its collapse.
He said the incident could have occurred as wood and plastics kept in chimney holes during repair had remained there.
The kiln owner had distributed sweets to celebrate the reopening of the kiln yesterday.
"We heard a loud noise as we were having sweets. There was a stampede," said Jalil Hussain, adding: "The workers sustained injuries in the stampede."
Over 850 brick kilns operate in Nepal, employing thousands of labourers from across the country as well as from neighbouring India.
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