Authorities said Amit Kumar ran the ring from a New Delhi suburb that allegedly removed kidneys from up to 500 poor laborers and sold their organs to wealthy clients.
Police suspect that dozens of doctors were involved in the kidney racket, which had a waiting list of some 40 people hailing from at least five countries.
Kumar was arrested in the jungle resort in Chitwan by Nepalese police on Thursday night, said Kiran Gautam, police chief in Chitwan district, about 100 miles south of Katmandu.
Gautam said Friday that Kumar has been being sent to Katmandu where officials will further investigate.
Indian embassy officials in Katmandu were not immediately available for comments early Friday morning.
Gautam said police have been looking for Kumar since reports surfaced in the Indian media that he might have fled to neighboring Nepal.
Police were able to identify him because his photographs had been published in newspapers and broadcast on Indian television channels, Gautam said.
Authorities said the scam, centered in Gurgaon - a posh suburb of New Delhi - used luxury cars outfitted with blood-testing machines to test donors on the fly as well as sophisticated surgical equipment hidden inside a residential neighborhood.
Kumar, who has several aliases, and has been accused in past organ transplant schemes elsewhere in India.
