At least 50 people were killed on Friday after a train ploughed into revellers celebrating a Hindu festival in northern India, police said, the latest major accident on the country’s crumbling rail network.

A crowd had gathered on railway tracks in the city of Amritsar in Punjab state to watch a fireworks show marking the Dussehra festival when the train barrelled down the line at speed.

"There are more than 50 dead. The priority now is to take the injured to the hospital," Amritsar city police commissioner SS Srivastava told reporters.

More than 60 people who were injured were being given emergency treatment at various hospitals across the city, he added.

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An AFP photographer at the scene said some victims had lost limbs in the accident while others suffered head wounds.

"There was a lot of noise as firecrackers were being let off and it appears they (victims) were unable to hear the approaching train," a police official told AFP on condition of anonymity.

An eyewitness told a local TV channel there was "utter commotion" when the crowds noticed the train "coming very fast" towards them.

"Everyone was running helter-skelter and suddenly the train crashed into the crowds of people," he said.

Punjab Chief Minister Amarinder Singh ordered an investigation into the deadly accident and announced a monetary compensation of 500,000 rupees ($6800) each to the family of the victims.

"We have reports that some 50-60 people have died. We have asked all hospitals to remain open through the night so that the injured can be treated," Singh told reporters.

Prime Minister Narendra Modi said he was extremely saddened by the "heart-wrenching tragedy" and asked officials to provide immediate assistance to the injured.

Some relatives of the deceased blamed the authorities for allowing a "big function" to be held next to the railway track.

An eyewitness said people were taking pictures on their mobile phones and "they were not given any warning that they should not stand on the tracks."

India’s railway network is the world’s fourth largest and remains the main form of travel in the vast country, but it is poorly funded and deadly accidents often occur.

The country is home to hundreds of railway crossings that are unmanned and particularly accident prone, with people often ignoring oncoming train warnings.