Indian border guards killed a Nepali citizen over a local dispute in a rare shooting at the border, Nepal's government said, prompting anti-India protests in the area and in the national capital on Friday.

India and Nepal share a 1,751-km (1,094 miles) long and open border and thousands of people cross over each day to work and trade, but Nepali politicians have often accused India of meddling in its affairs.

Dozens of people were protesting over a damaged culvert in Nepal's Anandabazaar near the border with India on Thursday when Indian border guards opened fire, killing a 25-year-old man, a government statement said.

An Indian foreign ministry spokesman said India's border guards had opened an inquiry and had asked Nepal to provide a forensic and post mortem report on the victim.

It said officials from the two countries had met and agreed to take steps to maintain calm.

But on Friday, fresh protests erupted in Anandabazaar, which is 477 km (298 miles) southwest of Kathmandu, with an even bigger group of Nepalis attacking a local government office, Home Ministry spokesman Bal Krishna Panthi said.

"The area is tense," a police official in the region said.

Another group of demonstrators tried to march on the Indian embassy in Kathmandu in protest over the shooting, but were stopped by police, leading to scuffles, police official Chhabi Lal said.

Nepal's ties with India were strained towards the end of 2015 and into last year after it blamed India for tacitly supporting a months-long blockade on fuel and goods by Indian-origin plainspeople who are opposed to Nepal's constitution.