Pakistan Rangers personnel spotted two men trying to sneak into Pakistani territory two days ago and asked them to stop.
The Rangers opened fire when the men tried to escape.
One of them, identified as Pakistani national Yasir Masih, was killed instantly while the other sustained injuries.
Officials said both men were allegedly involved in smuggling liquor from India.
The injured man was taken to a hospital in Lahore, where doctors described his condition as critical.
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