Kathmandu, March 27 (IANS) Seven people were injured Tuesday in a broad daylight shootout by a suspected Indian gang in Nepal's frontier Parsa district.

Though Chhotelal Sahani, the alleged leader of an Indian gang that had been preying on traders in both India and Nepal, is currently in India's Motihari jail, there has been no respite for businessmen in southern Nepal, who continue to be plagued in his name.

Four men arrived on motorcycles in the Chandal Chowk area of Parsa and fired at a shop, including shop-owner Vinod Gupta, when the country was celebrating the Hindu religious festival of Ram Navami, preliminary reports said.

More than half the injured are said to be Indians. Some of the injured were rushed to neighbouring Indian city Patna for treatment.

The gunmen left pamphlets at the site, claiming the attack to be the handiwork of Sahani. "You have a choice," the pamphlets said. "Your money or your life."

There were several attacks on businessmen last year, allegedly by members of the Sahani gang, near their residences or work places for resisting extortion demands.

Tuesday's attack comes even as Nepal has been expressing fear that Indian criminals were involved in last week's massacre in another frontier town in Nepal - Gaur - where at least 29 people died and dozens were injured.

Human rights and media teams that visited the town in Rautahat district after the last carnage suspect the involvement of local politicians from Indian border towns.

Bihar politician and former MP Anand Mohan Singh, accused in several criminal cases, had been holding public meetings in Indian towns adjoining Nepal's border just before the Gaur massacre and there is rising clamour in Nepal for an investigation into the Indian connection.

Singh and other Bihar politicians, like former minister Dadan Singh Yadav, Shakuni Chaudhary, Vashihst Narayan Singh and former legislator Rambachan Paswan, have been addressing mass meetings in Indian towns, supporting Nepal's Madhesi Janadhikar Forum - an ethnic group demanding an autonomous state for Terai people in southern Nepal.

Subodh Pyakurel, the chief of the Informal Sector Service, Nepal's biggest NGO, said rights activists were told by villagers that 300 people bearing arms had arrived in Gaur from across the border a day before the attack.

"The government should conduct an investigation," said Sushil Pyakurel, a former member of Nepal's National Human Rights Commission. "Then it should begin talks with the Indian government to look into these allegations."