The arrests came off the coast of Delft island and Vettilaikerni in the northern Jaffna peninsula.
"Three fishing boats had also been taken into custody and the fishermen had been handed over to officials from the Fisheries Department in Jaffna for further action," Navy Spokesperson Commander Indika Silva said.
The 16 are the first arrests since Sri Lanka released all the Indian fishermen in its custody last month.
Meanwhile, a report from Rameswaram in Tamil Nadu said, Selvaraj, a fisherman, fainted and died in a fishing boat while fishing in the mid sea last night. The cause of the death was not known immediately, Assistant Director of Fisheries Department Ravichandran said.
The fishermen, who went for fishing in about 440 boats, were not allowed to fish in the vicinity. The navy personnel also allegedly pelted stones at their boats, he said.