Three people were killed and over a dozen injured on Sunday when two men on a motorbike targeted a prayer hall with a grenade in northern India, police said.

Two masked men threw the grenade towards the hall belonging to a sect of the Sikh faith at a village on the outskirts of Amritsar city in Punjab state, said police officer Dinesh Singh.

He said the grenade exploded away from the main congregation in the compound, where hundreds of devotees were praying.

Mr Singh said 15 injured people were hospitalised.

“It appears to have a terror angle. Because it is against a group and it is not against any individual. There is no reason to throw a hand grenade on a group of people, so we will take it as a terrorist act," Punjab Director General of Police Suresh Arora said, according to The Times of India

Police said the men fled from the scene after carrying out the attack.

Punjab has been largely peaceful for over two decades after Indian authorities brutally suppressed a violent insurgency for an independent Sikh homeland in the 1980s and early 1990s. The violence killed thousands in the state.

In 1984, Sikh militants seized the Golden Temple in Amritsar, the Sikh religion's most revered site, triggering massive fighting that killed many insurgents. In a reprisal attack, India's prime minister at the time, Indira Gandhi, was shot dead by her Sikh bodyguards.