The deceased were identified as Haridas (48) and Biju Krishnan (33), police said.
The explosion occured while transferring cooking gas from a large cylinder to small ones on March 17 at the unit. While one dies on the spot, others died on subsequent days.
Five persons are still undergoing treatment for burn-injuries suffered from the explosion, they said.
The unit was running without proper permission and no safety precaution were made in it, police said.
He was arrested on March 19 and remanded to judicial custody.