The two drug traffickers have been identified as Firozuddin alias Bittu (31), a resident of Nizamuddin area in southeast Delhi, and Shaju (44), a native of Kerala, the police said.
Bittu was arrested near Rajdoot hotel in southeast Delhi's Bhogal area where he had allegedly come to hand over a consignment to his associate Shaju yesterday, police said.
"They had packed the heroin in a silver foils and put them inside cartons of corn flakes to deceive cops," said a senior police official.
"He had received drugs in the past from different intermediaries in Delhi and had supplied those consignments in Kerala, as instructed by Jabbar," said the official.
Bittu entered into drugs business after meeting one Naushad, who was a marijuana peddler. After Naushad was arrested by Punjab police around a year ago, his aide Sheikh roped in Bittu in the racket.
The accused have been booked under relevant sections of NDPS Act, police added.