The bomb, placed in an auto rickshaw, exploded Tuesday in a busy market area near a police base, the BBC reported.
Most of those killed were civilians, including those eating at food stalls. Many among the injured were reported to be in serious condition.
Numerous separatist group have been active for years in India's northeast region, which is close to the borders with Bangladesh, Bhutan, China and Myanmar.
Earlier this week, a grenade attack was reported outside the home of the state chief minister. No one was injured in that explosion, which was claimed by a separatist group calling itself the People's Revolutionary Army of Kangleipak.