Motorists line up outside a gas station as fuel rations are implemented in Kathmandu on Monday.

Reuters/Kathmandu

Protesters marched in Nepal's capital on Monday carrying an effigy of Indian Prime Minister Narendra Modi, accusing their giant neighbour of imposing an economic blockade and meddling in internal politics over the adoption of a new constitution.

Tension between the South Asian nations has spiked since Nepal adopted the charter last week. It has upset southern minority groups, who fear being marginalised in a new federal structure it lays out, dividing their homelands.

More than 40 people have been killed in protests in the Himalayan republic since August. Indian oil trucks stopped crossing into Nepal because of protests in the south, prompting authorities to try to limit use of cars and save fuel.

A few trucks carrying fuel, vegetables and building materials started to cross the border into Nepal on Monday but hundreds more were waiting to cross, a customs official in Nepal said.

The protesters in central Kathmandu carried an effigy of Modi and shouted: "Down with Indian expansionism! Down with Modi!" before police scattered them and confiscated the effigy.

"We are asking India 'Please, please open up the border and stop interfering in Nepal's internal issues'," said nursing student Amrita Baral, who was among 130 protesters in a second march headed for the Indian Embassy in Kathmandu.

A representative of India's Ministry of External Affairs declined to comment on the new protests.

Nepal's largest trading partner, India strongly denies a trade blockade, saying its trucks have been hampered from entering Nepal firstly due to security concerns and later because protesters were blocking the roads.

A Foreign Ministry spokeswoman said Nepal had asked China to hasten the re-opening of two border crossings closed since two earthquakes struck in the spring killing nearly 9,000 people and leaving Nepal almost totally dependent on India for overland supplies.

India has been critical of Kathmandu for rushing through the constitution, despite opposition from minorities living close to the Indian border.

Nepal started rationing fuel for vehicles on Sunday, said Nepal Oil Corp spokesman Deepak Baral, after trade ground to a halt at crossing points on the India-Nepal border.

Hundreds of trucks carrying food and fuel lined up on the Indian side, while opposition protesters on the Nepal side sat on the road to block their path.

Some trucks started to move across the Sunauli-Bhairahawa border crossing on Monday, a customs official in Nepal said, but more than 1,000 trucks were still waiting in India.

"(Indian customs officials) are telling me, 'We're giving permission, there's no problem,' but we are still seeing a huge decrease in the number of trucks passing through," said Lawanya Kumar Dhakal, Bhairahawa's chief customs official.