The seizures and arrests were made from Karimnagar railway station, Deputy Superintendent of Police J Rama Rao said this evening.
Addressing a press conference, Rao said on receiving a tip-off a police team rushed to the railway station where the trio, including Botla Rajendra Kumar (48), a Maoist, had assembled to conclude a deal.
Rajendra had struck a deal with ammunition supplier Vikas Kumar (32), a resident of Kanpur in Uttar Pradesh, through another dealer Suneel Kumar (53), a native of Khanapur in Adilabad district, four months ago in in Warangal district.
Later, Rajendra and Suneel reached there with a cash of Rs 16 lakh. While they were exchanging the ammunition and cash, the police surrounded and arrested them, Rao said.
The trio will be produced before a court tomorrow, the police officer added.