The fire brigade managed to rescue seven babies from the unit's inbound ward but could not rescue the other 10.
All infants that were killed in the blaze were between a month and three-months in age.
There will be no compromise on safety and a fire audit of hospitals in the state has been ordered, he said in a statement. Initial reports indicated that the fire may have been caused by a short circuit in one of the incubators, Tope said. "There was too much smoke", he added. "A detailed inquiry has been ordered into the incident and clear instructions have been given to conduct an audit of all hospitals that are equipped with neonatal intensive care units to prevent a repeat of such incidents", Pawar said.
The rescued babies were shifted to the other units.
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Indian Express has reported that the fire affected the "outborn section" of the hospital which is for children born elsewhere but referred to the government hospital for some kind of special treatment.
In a tweet, Mr Modi said his thoughts were with the bereaved families.
"The fire accident in Bhandara district hospital, Maharashtra is very unfortunate".
Heart-wrenching tragedy in Bhandara, Maharashtra, where we have lost precious young lives. "I hope the injured recover as early as possible", tweeted Prime Minister Narendra Modi. My thoughts are with all the bereaved families. I am pained beyond words.
Defense Minister Rajnath Singh said he was "deeply saddened".
"The unfortunate incident of fire at Bhandara District General Hospital in Maharashtra is extremely tragic".