Amit Kumar allegedly removed hundreds of kidneys after luring poor workers to a secret operating theatre before transplanting them to wealthy clients, many of whom were from overseas.
Indian police earlier arrested Amit Kumar's sister-in-law Pooja and her driver Umesh in relation to the organ transplant racket.
Five other suspects including another doctor have also been detained for allegedly luring poor donors from the northern Indian state of Uttar Pradesh and selling their kidneys.
Shriprakash Jaiswal, India's junior home (interior) minister, said an extradition order will be sought once they confirm the arrest.
"We have not received any authentic news on the arrest of Dr Amit. But, according to the information supplied by the sources, it seems that he has been arrested," Shriprakash said.
"If he has been arrested then,... the procedure for his extradition will be started and according to the laws of Nepal and India, the police will initiate necessary action against him."
Illegal organ transplants are not new in India.
Last year, police in southern India said they found evidence of illegal trade in kidneys sold by poor fishermen and their families whose livelihoods were destroyed by the 2004 Indian Ocean tsunami.