The local police was called in, who took Nido Tania to the police station, and later released him, after the youth agreed to pay Rs 7,000 as compensation.
Later, as Nido was walking alone in front of the shop, the shopkeeper and his friends attacked him with rods and sticks, and beat him badly.
Nido was admitted to AIIMS where he died on Thursday morning.
Nido was staying with four of his friends in Lajpat Nagar. His body will be taken to Arunachal Pradesh tomorrow. Nido's father Nido Pavitra is the Parliamentary Secretary in charge of Health in the state government.
Arunachal Pradesh students staying in Delhi will be holding a protest in Delhi on Saturday.
The students allege that there are often ridiculed as Chinese, and racial remarks are passed against them.
Aam Aadmi Party spokesman Dilip Pandey today said, "we are hurt. It shows lawlessness in delhi. It's condemnable, and stringent punishment should be given to the accused".
He demanded a probe into the police role in the entire episode.
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