The incident was reported around 7.30 pm yesterday.
"Two-year-old Raunak was playing near a traffic intersection when the speeding Audi Q7 SUV allegedly crushed him to death. A police team rushed Raunak to a hospital, where he was declared brought dead," a police official said.
The driver, identified as Sanjeev (25), was held by locals and handed over to the police. He has been booked under Sections 279 (rash driving) and 304A (causing death by negligence), DCP (Northwest) Vijay Singh said.
The police also took the driver for a medical examination and he was not found drunk, the official added.