Chandigarh, Dec 12 (IANS): With the arrest of two people and seizure of four kg of heroin, Punjab Police on Saturday said it has busted a major drug cartel with an international trail as well as links to gangsters and terrorists.

Initial investigations have exposed a nexus of the accused -- Jaswinder Singh and Ramesh Kumar, both residents of Jalandhar district -- with some gangsters lodged in Punjab's jails and a Dubai-based smuggler.

Director General of Police Dinkar Gupta said investigations suggest that the proceeds generated from the sale of the drugs, smuggled into Punjab from Kashmir, were probably being used to fund terror activities.

"Further investigations are in progress to unravel the international conspiracy and network, complete with backward and forward linkages," he said.

Besides the heroin, two.32 bore pistols and a car have been recovered from the accused, who used to bring drugs from Srinagar on instructions from imprisoned gangsters in Punjab.

The drug cartel's links have been traced to a Dubai-based individual, who is allegedly involved in networking with the drug smugglers in Kashmir for supply of drugs to drug smugglers and traffickers based in Punjab.