Kathmandu, Dec 13 (IANS): A seven-year-old Indian boy, who was kidnapped from Bihar last week, has been rescued from Nepal and three people, including a political leader here, have been arrested in connection with his abduction, the police said.

Mahafuj Alam was rescued by the police from a hotel in Nepal's Damak area on Tuesday, the Kathmandu Post reported on Thursday. The abductors had demanded Rs 1.5 million for Alam's safe release.

The detained people were identified on Wednesday as Badri Yadav, 47, Shree Prasad Mukhiya, 31 and his wife Anju Devi Mukhiya, 27. Yadav, a leader of the Sanghiya Samajbadi Forum-Nepal party, had contested the 2017 Parliament elections.

Alam was kidnapped on December 6 from his maternal uncle's house in Bihar and the kidnappers took him to Nepal's Gaurgunj, where he was handed over to Yadav and the Mukhiya couple, the police said.

The arrested trio kept the boy in Gaurgunj for two days after which he was held hostage at Deurali Hotel in Damak.

They later telephoned the boy's family and demanded the ransom money for his release and threatened to murder him if the ransom was not provided, said police officials.

The Nepal Police and Indian Police were jointly investigating the case. The trio were presented at the district court where they were remanded into custody for five days.