The victims were standing on the railway tracks watching celebrations for the Hindu festival of Dusshera, eyewitnesses told BBC Punjabi.
They did not hear the train approach as they watched a firecracker-filled effigy of the demon king Ravana burn.
Officials said the priority now was to take the injured to local hospitals.
Footage posted to social media showed the fast-travelling train hitting the crowd.
Punjab Chief Minister Amarinder Singh described the incident as absolutely tragic, and wrote in a tweet that local authorities were being mobilised.
We will do everything possible to assist the injured, he said, adding: [I] have directed the district administration to leave no stone unturned to ensure the best possible treatment for them.
There are fears that the death toll will rise further.