The bus was heading to the Indian town of Gorakhpur, returning from a pilgrimage to the famed Hindu temple of Pashupatinath in Kathmandu, when the accident happened.
“Twelve Indian passengers, six men and six women, died on the spot. We have rescued 29 people from the site,” Hemant Bahadur Chettri, a local police official, told AFP.
The injured have been taken to Kathmandu for treatment.
Deadly crashes are relatively common in the impoverished Himalayan nation because of poor roads, badly maintained vehicles and reckless driving.
Four South Korean tourists were killed on the same highway last month when their minibus hit a bus coming from the opposite direction.