The rescue team is currently carrying out the search operation at the spot, news agency ANI reported, adding that the group of the missing includes four women and a man.
The rescue operation is complicated due to harsh weather conditions, according to the report.
The mushroom, Yarsagumba or Ophiocordyceps sinesis, is usually found at altitudes up to 5,000 meters (16,404 feet) in Nepal, India and Bhutan. It is used as aphrodisiac.
Inhabitants of western Nepal harvest Yarsagumba, which they see as a lucrative source of income -- one kilogram (2.2 pounds) of the mushroom costs about $20,000. In May and June, when this miracle mushroom matures, schools in western Nepal close and villages become empty as the locals leave in large numbers to pick yarsagumba.