Police said the accused had obtained the counterfeit notes from a person, Nazurul Islam, of Murshidabad who had allegedly procured them from Pakistan.
While Ansarul Shaik (22), Jiyarul Shaik (26), Ahakamal Islam (23) and Mottakul Islam (23) were arrested from a lodge here on a tip-off, Nazurul, believed to be the kingpin of the gang, is absconding, they said.
"The four accused connived with Nazurul Islam and obtained the Pakistan-made counterfeit currency with a face value of Rs 1.8 lakh in Kolkata and came to Visakhapatnam on November 11. They had been staying here at a lodge," Additional DCP (Crime) S Varada Raju told a press conference.
Police said Malda and Murshidabad districts in West Bengal are hotbed for the fake currency trade. The currency is smuggled from these districts to coastal Andhra Pradesh.