The collective value of the seizure, which included cash worth Rs 29.40 lakh, eight vehicles, and 15 mobile phone handsets, is estimated at Rs 3 crore.
Kadapa district Superintendent of Police Bapuji Attada said the arrested men included two smugglers with international links.
"The arrested group included two international and three inter-state gangsters besides seven of their key aides," he said.
He said Sethu Madhavan (36) and Mubarak Ali (40), both from Chennai, are close associates of Dubai-based red sanders smuggler, identified as Ali Bhai.
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Police seized two lorries and six cars during the operation.
The SP said the estimated cost of the 1.5 tonne red sandalwood logs is Rs 1.5 crore.
All the arrested persons have been booked under various sections of the IPC.
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