The Dornier carrier owned by Agni Air company plunged into a hill close to Jomsom airport near the Annapurna mountain range, after it hit a muddy slope, burying it in the side of the hill. Front portion of the plane was completely damaged.
Among those killed, 13 were Indian tourists and the other two were Nepali pilots. Six passengers miraculously survived the crash, Nepali police spokesperson Binod Singh told AFP.
Two Danish nationals were among the passengers, but their condition remained unknown, Agni Air marketing manager Pramod Pandey said.
A Nepal army barracks was near the accident site which made the rescue of survivors easier, Rajendra Singh Bhandari, Nepal police regional spokesman was quoted as saying.
India has announced setting up round-the-clock helpline in its embassy in Kathmandu to provide information on the air crash. Indian External Affairs Minister S.M. Krishna was in touch with country's ambassador to Nepal.
I am deeply saddened to hear about the tragic air crash that occurred earlier this morning near Jomsom airport in Nepal. I would like to convey my deep condolences to the families of all those who have lost their lives in this accident. Our thoughts and prayers are with the families of all those who have lost their near and dear ones, the minister said in a message, reported the Press Trust of India.
The Jomsom airport, about 125 miles northwest of the capital, Kathmandu, is a gateway to Muktinath, a popular tourist and pilgrim destination.
This is the second instance of an Agni Air carrier crashing in less than two years. Fourteen people were killed in August 2010 when an Everest-bound plane crashed near Kathmandu.
A Buddha Air carrier crashed in September last year, killing 19 passengers.
[This story was last updated at 6:30 AM EDT]