Investigating officers suspect that cadres of a local political group have caused the blast. The party had called a general strike in Biratnagar on Monday.
The security around the blast site has been upped after the incident.
Meanwhile, security sources in New Delhi citing inputs from Nepal said a small explosion took place at Biratnagar at the Indian Embassy consulate office.
This is a temporary office which had been set up during floods in Nepal and north Bihar and continues to function since then.
The explosion happened at around 8:20 pm and caused a hole in the compound wall. No one was in the office at the time of the incident, sources said.
Biratnagar is the industrial capital of Nepal and 6 km north of the border of Bihar.
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