One youth, 18, succumbed to bullet injuries when he was being rushed to a local hospital on Tuesday.
Clashes ensued between the refugees and the Indian police all day Tuesday. The police used force to prevent them from crossing the Mechi Bridge on the Nepal-Indian border on the second day of their "Long March" to Bhutan.
Meanwhile, the Nepali government has requested the Bhutanese refugees not to carry out any works likely to spread tension and agitation, and to return to their camps and maintain law and order.
Around 15,000 refugees had joined the "Long March" at the call of National Front for Democracy. The march was launched on the day when Bhutan government held second round of mock elections in preparation of its 2008 parliamentary polls.
About 107,000 Bhutanese refugees have been living in seven camps in eastern Nepal for the last 16 years.