The 21-year-old was co-driving for Miguel Socias as part of the Peugeot Rally Cup Iberica.
"Peugeot Sport wishes to express their sincerest condolences to the family and friends of co-driver Laura Salvo," Peugeot Sport said on Twitter.
In a statement, organisers said medics attempted to resuscitate the Spaniard but she died at the scene before she could be taken to hospital.
On Twitter, Spanish Formula One driver Carlos Sainz wrote, "Very shocked by the news... All my support and affection to her family and friends." (Reporting by Arvind Sriram in Bengaluru; Editing by Clarence Fernandez)