Three children were killed when a live bomb they thought was a toy exploded near a firing range of the Indian Army in Arunachal Pradesh's Anjaw district, an official said on Sunday.
The incident occurred on Saturday evening at Chirang village when the children picked up the used shell and began playing with it.
The shell exploded, killing them on the spot.
Chief Minister Pema Khandu expressed shock and grief at the incident, and condoled the deaths of the three children.
He announced an ex-gratia of Rs 4 lakh each to the family of the victims.
Mr Khandu cautioned the villagers against going near danger zones such as the army firing ranges.
The Chief Minister also asked the Indian Army to issue advisories or put up sign boards depicting danger zones or restricted areas.
"Such incidents should not recur, for which extreme precautionary measures have to be put in place by the Army, the civil administration and the village elders," Mr Khandu said.