The duo, identified as Tushan Sharma alias Maddi and Kuldip Singh alias Baija, were arrested and 100 gramme each of heroin was recovered from them, they said.
Residents of Hadiabad and Kapurthala respectively, the two accused were arrested by a police party during a checking in Satnampura Police Station area.
Phagwara DSP Manpreet Singh Dhillon claimed that the seized heroin was worth Rs one crore price in the international market.
He said that both the peddlers were arrested under relevant sections of the NDPS Act.