Those arrested have been identified as Satyanaryan Lunia, Dinesh and Shankar, said a senior police official.
"We have arrested the trio from Agar-Malwa district's Soyatkalan town near MP-Rajasthan border. They were carrying a reward of Rs 40,000 on their head," Additional Superintendent of Police (ASP) Amrendra Singh told reporters here.
Lunia is a key member of Satish Bhau gang in the city. A pistol and a cartridge were recovered from his possession, he said.
"Because of an old enmity, they fired at one Achal Awasthi belonging to a rival gang on January 17 in Indore's Manglia area. At the time of incident Awasthi was returning from Dewas after meeting his brother who was lodged in a jail there in connection with some case," the officer said.
After the incident on January 17, the accused were hiding in MP, Rajasthan and Delhi, he added.