The clash took place when the BSF personnel were chasing smugglers during a routine patrol in the area near the Indo-Bangla border last night, BSF DIG B S Rawat has said.
Among the injured were nine villagers and a BSF man, the BSF DIG said.
When the BSF jawans started chasing the smugglers, the villagers attacked the security men with lathis, the DIG said.
The BSF initially fired in the air to disperse the mob and then opened fire in "self defence" in which a villager, Ismail Mia, was killed and nine villagers were injured, the DIG said.
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IG (Police control) N C Das also confirmed that a villager and a BSF jawan were killed in the violence.
The injured were rushed to G B hospital where nine of them were admitted. The BSF man was discharged after first-aid, hospital sources said.
Meanwhile, Bhanu Mia, the brother of the villager who was killed in BSF action, in an FIR lodged at West Agartala police station said that the border guards opened fire after picking up a quarrel with them when they were resting near a pond.