The police opened fire, allegedly killing two protesters. One more protester, who was allegedly injured in the firing, died later, said local sources.
The situation is tense amid growing anger at police action against protesters; on Tuesday, the police had opened fire, after using batons and tear gas, at student protesters blocking the National Highway that leads to Nagaland.
21 people were injured and one was crushed to death under a truck during the clash. The police had asserted that no one had been injured in the firing yesterday; they claimed that they had used rubber bullets to control the mob. One constable has been suspended over the death of the protester.
Angry protesters have since then blocked the National Highway 37 by burning tyres and felling trees at several sites on the road. Trucks and a police jeep were also reportedly burnt by protesters.
Prime Minister Narendra Modi has asked the home ministry for a report on the situation. Assam chief minister Tarun Gogoi has blamed the central government saying it "was not proactive in helping us."
Assamese students and other groups had blocked the highway on Tuesday to protest against the killing of at least 15 people in a wave of violence by Naga insurgents in seven villages along the border in the last week. About 10,000 villagers have taken shelter in relief camps.
There is a 50-year-old dispute over these border villages between Naga and Assamese people, which continues despite a Supreme Court-backed mediation process. A temporary pact places the disputed area under central forces, but local people say they don't feel safe.
Minister of State for Home, Kiren Rijiju, will travel to Assam tomorrow to assess the situation. "It is a dispute between Assam and Nagaland. They should sit together and resolve it," he said today.
He will meet both Assam Chief Minister Tarun Gogoi and his Nagaland counterpart TR Zeliang, who are scheduled to discuss the border problem tomorrow.