The chameleon was recovered from the two while the animal was being smuggled out from Kharinasi ferry ghat under Mahakalpada police station, forest department officials said.
The chameleons are protected under the International Trade in Endangered Species Act and Indian Wildlife Protection Act, 1972.
The chameleon was later released back in the forest, the officials said.
The arrested two, Subhash Behera and Subhendra Nanda, both natives of Erasama in neighbouring Jagatsinghpur district, were allegedly involved in smuggling of endangered chameleons from the Bhitarkanika wildlife sanctuary.
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