Third accused, a Chinese national identified as Chen XI GUI, managed to escape from the spot.
The arrested include Birbal Yadav (32) and Jitender Yadav (26), brothers and natives of district Jamui in Bihar.
On December 23, Kotwali police got a tip off about sandalwood being smuggled and laid a trap opposite old Delhi Railway Station Exit Gate and apprehended the two accused and recovered around 487 kg of sandalwood from them.
"The copies of passport have been obtained from the hotel and further probe is on," a senior police official said.