The children, hailing from Bihar, were forced to labour in the unit, police said, adding that six persons involved in the business had also been arrested.
They were rescued in a joint operation carried out by the anti-human trafficking unit of local police and activists.
The raids was conducted in three houses following a tip-off.
Police said the children were used in making of bangles and aari-tari (embroidery) work for around 14 hours a day.
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