The 12 Indians were among 20 people, including six Pakistani nationals, arrested yesterday.
Police spokesperson Madhav Poudyal said the Indians were released as there were no sufficient evidence against them.
Two Nepalese citizens who were also arrested with the group of foreigners were realesed today.
However, the six Pakistani nationals have been detained further for questioning and their involvement in any anti-social activity is being probed, the spokesperson said without giving other details.
They were staying in the country even after the expiry of their visas, police said.
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