The deceased has been identified as 13-year-old Khari Budha of the same locality.
Bishnumati Budha (25) and her five-year-old son Dhan Krishna were injured.
They are undergoing treatment at a local medical facility.
They were inside a15 feet long tunnel when the incident took place, the local residents said.
The special type of reddish brown clay is used to paint homes in villages.