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28-year-old Emdadullah alias Mahbub was captured by the police when they raided his hideout past midnight at Gabtali area of Dhaka on a tip off, Deputy Commissioner Police Monirul Islam told mediapersons.
Emdadullah, who the Bangladesh police say escaped from the custody of the West Bengal police in 2006, was also suspected to be active for India's Asif Reza Commando Force.
Islam said Emdadullah had told the police that he had sneaked into Bangladesh in 2006 and was tasked to oversee cross-border movement of the LeT militants.
Police said he was also involved in movement across borders of explosives and bomb making materials.
The arrest of the Indian militant comes weeks after five suspected militants of India's National Democratic Front of Bodoland from the remote Dighia Nallah area of Khagreachhari Hill District.
The DCP also said that the arrested militant had received arms training in Pakistan and hailed from West Bengal's North 24 Parganas district. Islam said that police had earlier arrested two other key LeT militants, Mufti Obaidullah and Ali, both suspected to have links with the ARCF who gave information on Emdadullah.