The incident took place at around 8.30 a.m. when a cylinder containing ammonia gas started leaking. As the gas spread, labourers started vomiting and fled from the factory.
Soon they developed rashes on their bodies and began fainting following which panic-stricken residents of Gopalnagar, where the ice factory is located, also left their houses.
Police too asked them to leave their houses.
A sharp odour, an official told IANS, was emanating from the factory and was spreading to nearby areas.
Fire tenders have been rushed to the spot and were sprinkling water to contain the gas leak, district officials said.