Among the injured pilgrims, six were residents of Delhi while one was from Jaipur, capital city of Rajasthan.
The driver of the tanker, Shiv Kumar, died on the spot, the officials said, adding that his body had been recovered.
The pilgrims, who were on their way back from the Amarnath shrine, have been admitted to a hospital.
As soon as the news of the accident got spread, locals, police and army personnel reached the spot and rescued the victims who were shifted to an emergency hospital in Banihal.
They were late referred to GMC hospital in Jammu for specialized treatment.