Authorities were trying to determine how many people were at the construction site when the structure crumpled in Canacona, a city about 70 kilometers (44 miles) from the state capital of Panaji, Police Superintendent Shekhar Prabhudessai said.
Witnesses said about 40 workers were at the site.
"It was like an earthquake when the building fell," witness Ramesh Naik said. "You could not see what exactly had happened because of the dust."
Police and residents pulled seven bodies from the wreckage, while firefighters and rescue workers were sifting through the debris for survivors.
Ambulances took at least three seriously injured workers to a hospital for treatment.
Prabhudessai said the cause of the collapse had not been determined.
Building collapses are common in India, as massive demand for housing and lax regulations often encourage builders to cut corners by using substandard materials or add unauthorized extra floors.