A Nepalese "agent" of Amit Kumar, the alleged kingpin in the multi-crore kidney racket, has been arrested in Saptari district of eastern Nepal.
Pankaj Jha, 34, was arrested on Thursday from his house at Barhibirpur village, Nepal Police spokesman Sushil Bar Singh Thapa told PTI.
Police claimed that Jha had confessed to his involvement in the kidney racket.
Many poor Nepalese residing in rural areas had fallen prey to Jha, who was running a nursing home in Kathmandu, they said.
Police had launched a search operation to trace Jha after Kumar was arrested at a resort in Chitawan on February 6. Kumar was later deported to India.
Police have started further investigation into the illegal kidney trade linking Nepal and India, a police officer said.