The government also said that it was monitoring the situation carefully.
"We are deeply concerned at reports coming in of firing today in Birgunj. An innocent Indian was also killed in the firing. Issues facing Nepal are political in nature and cannot be resolved by force. Causes underlying the present state of confrontation need to addressed by the government of Nepal credibly and effectively," Spokesperson in the External Affairs Ministry Vikas Swarup said.
"We are advising them to exercise caution and not put themselves in danger. We are monitoring the situation carefully," he added.
Since the promulgation of the Constitution in Nepal in September, the Indian-origin Madhesi population has been agitating as they believe the country's new Constitution discriminates against them, denying them equal standing with other Nepalis.
The agitation obstructed supply of essential commodities including petrol thereby creating a crisis in Nepal, which accused India of imposing a "economic blockade", a charge denied by India.