Mehraj-ud-din Mir and Gulzar Ahmad War, both residents of Saida Kadal, were arrested after police intercepted a van at a check point in Nowhatta area, a police spokesman said.
He said the search of the van led to the recovery of 130 bottles of Codeine Phosphate.
During investigation, the spokesman said the duo revealed that they supplied these bottles to the youth indulging in drug abuse in the city.
The van was also seized, the spokesman said, adding, a case has been registered and further investigations are on.