The homemade bomb went off in Imphal, the capital of Manipur state, killing three construction workers, said police Superintendent Ibomcha Singh.
Five other men were hospitalized.
No one has claimed responsibility for the blast.
Imphal is about 550 kilometers southeast of Guwahati, the biggest city in the region.
At least 17 separatist groups are active in Manipur state and often stage hit-and-run attacks on government forces. Their demands range from greater autonomy for the state to an independent homeland for the people of Manipur.
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