The incident happened near Bilaspur, about 116km from Chhattisgarh's state capital Raipur.
The goods train was stationary at the time of the accident, and the passenger train crashed into it from behind, damaging the passenger train's first few carriages, Deputy Chief Minister Arun Sao told reporters.
Television footage showed the mangled first carriage of the passenger train partially perched atop the last carriage of the goods train, as police and rescue teams tried to pull out survivors and a crowd watched from the parallel tracks.
Railway authorities said there would be a detailed inquiry into the incident.
In a statement, network operator Indian Railways said it has moved all its resources for rescue efforts and shifting the injured to local hospitals for treatment.
India's railway network is the fourth largest in the world and has been undergoing a $US30 billion ($A46 billion) transformation with new trains and modern stations.
Train collisions are not uncommon in India where the vast rail network faces issues of aging infrastructure and human error.
More than 12 million people travel on India's 14,000 trains each day across 64,000km of track.
Despite government efforts to improve rail safety, several hundred accidents - some deadly - occur annually and are often blamed on human error or outdated signalling systems.
with AP
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