The arrested man, identified as 57-year-old Wuthikorn Naruenartwanich alias Willy, is included on an Interpol list as a suspect wanted by India for terrorism offences, sources said today.
Thai police said Naruenartwanich was arrested at his home in Bangkok yesterday.
The next step could be his extradition to India, sources told PTI but did not elaborate.
Naruenartwanich has been accused of buying nearly 1,000 assault rifles and an unspecified number of rocket-propelled grenades to be sold to Naga rebels.
He has denied his involvement in gun running.
India's National Investigation Agency charged Naruenartwanich and three others in 2011 with criminal conspiracy to wage a war against the country. If convicted, he could face a death sentence or life imprisonment.
The outlawed NSCM-IM operated out of Bangkok and several other Thai cities till about a decade ago but most cadres of the group have reportedly moved out of the country.
A ceasefire between the NSCN-IM and the Indian government has held since it was inked in 1997.
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