"Two persons were killed and three others injured in the incident," said Gurdaspur DSP (City) Kulwant Rai.
Police suspect that the explosion occurred after a hammer was used to break some object in the shop.
Earlier, one person identified as Harpreet (35) was killed in the explosion and four injured persons were taken to the Gurdaspur civil hospital, from where they were referred to a hospital in Amritsar.
"Another person, identified as Tarsem (40), succumbed to his injuries later," the DSP said.
It was not a high-intensity explosion, police said, adding that a probe was on to ascertain the cause behind it.
Gurdaspur SP (D) Sareen Kumar said a team of experts from Forensic Science Laboratory, Mohali has been called.
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