The children had collected unused cartridges from the army's Sukanjuli test firing range on the Indo-Bhutan border to sell them in the local market when one of them exploded, police said.
While the boy died on the spot due to the blast, the injured were rushed to the civil hospital in Rangiya, the police said.
Locals collect unused cartridges from near the test firing range and sell them in the local market as there is demand for the copper in them.