The arrested women are identified as Jayashree and Anasuya.
According to police, Jayashree, the neighbour of the boy's mother (30), a housemaid, had allegedly sold the infant to Anasuya soon after his birth in the first week of September.
The boy's mother had sought financial assistance from Jayashree for delivery as her husband had left her last year, a Uppal Police Station official said.
"Soon after the (boy's) birth, Jayashree told the woman that the baby has been shifted to another hospital due to his ill-health. However, she allegedly sold the baby to Anasuya for Rs 40,000," the official said today.
During investigation, the police traced the boy to Medak and reunited him with his mother after rescuing him.
A case was registered against Jayashree and Anasuya under relevant sections of Juvenile Justice Act, he said, adding that police are investigating whether the baby's mother had any role in the matter.