Heavy rains triggered the disaster in the Himalayan state of Arunachal Pradesh, which lies on the Tibetan border and is claimed in part by China.
The workers, who were building a hotel, were asleep when the landslide hit their camp in Tawang district, more than 10,000 feet (around 3,000 metres) above sea level, according to AFP.
"Sixteen bodies have been recovered by police and emergency workers. One more is feared trapped under the debris," said Anto Alphonse, superintendent of police for Tawang.
"Three laborers survived and have received minor injuries. A total of 20 workers were at the spot when the massive landslide struck the construction site."
India's National Disaster Management Authority said police and soldiers had rushed to the scene.
Landslides are common in the Himalayas, particularly during heavy rains.