The traders were returning to their neighbourhood after buying vegetables from the wholesale market in Manikganj’s Jaagir.
Military sources said troops of the 6th Dogra battalion and 11th Assam Rifles battalion were involved in the raid across the border post of Molcham.
He told bdnews24.com that the troops positioned themselves on the border at night and crossed at daybreak.
"We encircled the rebel transit camp and attacked. Three rebels were killed and we even managed to drag two of the dead bodies back to Indian territory."
The dead included a self styled Major, a captain and a lieutenant of the Peoples Liberation Army (PLA) of Manipur.
This is the second such raid inside Myanmar by Indian troops after they attacked two bases there in July following a rebel ambush in which 18 Indian troops were killed in Manipur's Chandel district.