"The derailment took place at Sadoora after the train left the Qazigund railway station today (Wednesday) morning," a police officer told IANS here.
"Twenty people have sustained injuries. A relief and rescue operation was immediately started and the injured are being shifted for treatment," he added.
The officer said the derailment was accidental and ruled out any sabotage.
The train service between Qazigund and Baramulla connects the south and north of the valley. A 66-km section of the 119-km rail line, which is yet to be linked to the mainland rail network, was inaugurated on Oct 11, 2008, by Prime Minister Manmohan Singh.
In another train accident this morning, a goods train collided sideways with the Samaleswari Express at Jharsuguda station in Orissa, leaving seven people injured. (Read: Seven injured as goods, passenger train collide in Orissa