Police in the Indian capital, Delhi, say they have arrested two key members of the "Indian branch" of al-Qaeda.
They say the arrests are a significant blow to the group's operations in the sub-continent.
One of those detained is Muhammad Asif who is a founding member of al-Qaeda in the region, police said.
Al-Qaeda set up its South Asian operation just over a year ago, saying it brought together militant groups from across the region.
The group has said it was behind the killings of four secular bloggers in Bangladesh as well as several attacks in Pakistan.
Indian authorities said the two arrested men were involved in recruiting young Indians to the group.
They said Muhammad Asif, who is from the northern state of Uttar Pradesh, was arrested from under a flyover in the eastern state of Orissa on his way to meet a contact.
Three mobile phones, a laptop and "other incriminating articles" were seized from him, the police said.
The arrest of Asif, 41, led to the capture of the second man, who, it is alleged, ran social media for the al-Qaeda cell.
Delhi police say the arrests will provide crucial leads to uncovering the group's operations within India and in neighbouring countries.
The al-Qaeda chief Ayman al-Zawahiri said its regional unit would be good news for Muslims in Myanmar (Burma), Bangladesh and the Indian states of Assam, Gujarat and Jammu and Kashmir, where they would be rescued from injustice and oppression.
Correspondents say that although al-Qaeda still has no substantial presence on the ground in India, there is concern that it is trying to reach out to disaffected Muslim youth, especially in Kashmir and Gujarat.
Islamic militant groups operating in India have so far been mostly connected to Kashmiri separatists and have links, tenuous at best, to al-Qaeda via Pakistan-based groups.