The labour camp is located inside a ground-plus-one-storey structure in a project complex built to rehabilitate families displaced from Dharavi.
The fire is suspected to have started after a gas cylinder explosion. According to Deputy Commissioner of Police (Zone East 3) Abhaysinha Deshmukh, seven gas cylinders have exploded so far.
The exact cause of the fire is yet to be confirmed and is being investigated.
Several workers rushed out of the camp after the fire broke out. The sudden evacuation led to chaos at the site as thick flames spread through the structure.
Around 15 fire tenders and ambulances were sent to the spot. Personnel from Navghar police station and senior police officers also reached the area as fire brigade teams worked to control the blaze.
Police said that all people were evacuated safely from the camp. No deaths or casualties have been reported so far.
Security arrangements have also been put in place around the site as emergency teams continue to deal with the situation.
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