Abdul Subhan Qureshi, co-founder of the Indian Mujahideen (IM) and linked to the Students Islamic Movement of India (SIMI), was arrested from Ghazipur in east Delhi on Saturday evening.
The Special Cell had information that he would come to meet an old acquaintance in Ghazipur, said P S Kushwah, deputy commissioner of police (Special Cell).
Qureshi, 46, was being followed by teams of the Special Cell and other intelligence agencies.
He had been living in Nepal under a fake identity and had gone to Saudi Arabia between 2015-2017, Kushwah said at a press conference.
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His name had also cropped up in investigations into the serial blasts in Mumbai and Bangalore, the official said.
More than 50 persons were killed when 20 blasts ripped through Gujarat's main city Ahmedabad on July 26, 2008.
The Indian Mujahideen had taken responsibility for the blasts at the time.