Acting on a tip-off from Australian police, Indonesian authorities detained Rajendra Sadashiv Nikalje on sunday as he arrived in the popular resort island of Bali from Sydney,Bali police spokesman Heri Wiyanto said.
The 55-year-old Mr Nikalje, know in India as Chhota Rajan,had been evading police in several countries for yers, with Interpol flagging him as "wanted" in 1995.
"We received information from police in Canberra yesterday [Sunday] about the red notice for a murderer," Mr Wiyanto said.
"We arrested the man at the airport yesterday. What we know is that this man was suspected to have carried out 15 to 20 murders in India."
Mr Nikalje was the alleged former right-hand man of Mumbai crime kingpin Dawood Ibrahim, who is suspected of being behind the 1993 bomb blasts in the city that killed more than 250 people.
Mr Nikalje later became Ibrahim's rival, accused of running one of several underworld outfits that had a grip on India's financial and entertainment capital in the 1980s and 1990s until a police crackdown.
"It [the arrest] is very, very important because after Dawood's gang, his was the second most notorious and cruel gang," former Mumbai police chief PS Pasricha told an Indian TV station.
"People were so scared that they stopped even holding their marriages in Mumbai or purchasing expensive cars because the moment they did, they would get calls from gangsters for extortion."
Among other crimes, police accused Mr Nikalje in 2011 of ordering the murder of a prominent crime reporter who was gunned down in a drive-by shooting the same year.
Mr Wiyanto said Bali police were coordinating with Interpol and Indian authorities, adding it was likely Mr Nikalje would be deported to India.
A spokesperson for Australian Federal Police said Interpol in Canberra had alerted Indonesian authorities "whi apprehended Mr Nikalje at the request of Indian authorities".
The federal police confirmed last month that Mr Nikalje was living in Australia under another identity and had been in discussions with Indian authorities, the spokesperson said.
In 2001 he was wounded by gunmen who burst into a Bangkok apartment and killed his associate in what appeared to be a shooting ordered by Ibrahim. Because Mr Nikalje was facing a bid for extradition to India, he made an escape from the Bangkook hospital hr was being treated at. AFP