New Delhi, Sep 7 (IANS): Three people, including two Chinese nationals, were arrested for smuggling 2,725 kg of sandalwood worth Rs.1.25 crore, police said here on Monday.

Manvar Singh Negi, 30, was arrested on Sunday along with two Chinese nationals Ozhanmin Gai, 54, and Cheng Hu Hua, 43, for smuggling sandalwood in a truck.

"The accused were arrested near Shantivan with 2,725 kg of smuggled red sandalwood worth Rs.1.25 crore," Joint Commissioner of Police (Crime Branch) Ravindra Yadav said.

Red sandalwood is one of the most valuable tree species in India. It is an important and endangered export product that is highly traded illegally in the international market, Yadav said.

He said that it provides cash incomes and adds considerably value to the national economy.

Yadav said sandalwood costs around Rs.3,000-5,000 per kg in India and is in demand at much higher prices in China, Japan and other South-East Asian nations, where it is reportedly used in the manufacture of herbal aphrodisiacs.

"Investigation is in progress to find out the seller and receiver of the red sanders logs," the official said.