Police said the workers were making the crackers illegally at the unit in Karichery, for which licence had been cancelled by the government.
The accident reportedly occurred when they were mixing the chemicals and stuffing them in small tubes.
The fire spread instantly to some sheds and crackers exploded collectively, police said.
The sheds were destroyed and it took more than two hours for fire personnel to douse the fire and rescue the injured.
Meanwhile, officials raided some fireworks godowns in and around Sivakasi, the hub of fireworks industry in the country, and seized crackers worth Rs 14 lakh, besides arresting five godown owners.
