The two men being held are alleged to be in a Sikh terrorist organization, the Khalistan Zindabad Force (KZF), federal prosecutors said in Karlsruhe on Thursday.
The men were named only as 35-year-old Sukhpreet S. and 41-year-old Jagtar S M.
They allegedly helped acquire semi-automatic weapons and ammunition for the KZF and the younger suspect is also accused of involvement in procuring forged documents.
What is KZF?
The KZF is a violent group which seeks to create an independent state out of areas of India where the Sikh religion is in the majority. "Khalistan" is the name of the state it proposes to set up.
Prosecutors said KZF actively tried to smuggle explosives, small arms and forged money into the Indian state of Punjab. The resources and fund raising for the group is predominantly done in Europe.
In addition, KZF had attempted to topple moderate Sikh leaders at temples in Europe to expand their control over Sikhs abroad.
The two men remain in custody; one is being detained near Frankfurt, the other near Dusseldorf.
Author: Catherine Bolsover (dpa/AP)
Editor: Rob Turner