Heavy security forces were deployed and one house was surrounded in Shadnagar on the outskirts of Hyderabad on Monday morning.
A suspected Maoist was shot dead in the operation carried out by the Telangana Police.
MoS Home Kiren Rijiju said: "It's a serious matter that our security forces are engaging with the militants."
"We should not speak anything, or speculate when an incident is going on," said on Hyderabad encounter.
More details awaited