Nortorious gangster of India Rajendra Sadashiv Nikalje, alias Chhota Rajan, wanted over a series of murders in India, has been arrested in Indonesia, police said on Monday.

Acting on a tip-off from Australian police, Indonesian authorities detained Rajendra Sadashiv Nikalje on Sunday as he arrived in the popular resort island of Bali from Sydney, Bali police spokesman Heri Wiyanto told AFP.

The 55-year-old Nikalje, an alleged crime boss in India, had been on the run for two decades, Wiyanto said, with Interpol flagging him as a wanted man back in 1995.

"We received information from police in Canberra yesterday (Sunday) about the red notice for a murderer," he told AFP.

"We arrested the man at the airport yesterday. What we know is that this man was suspected to have carried out 15 to 20 murders in India."

Bali police were coordinating with Interpol and Indian authorities, Wiyanto said, adding it was likely Nikalje would be deported to India.

A spokesperson for Australian Federal Police said Interpol in Canberra had alerted Indonesian authorities "who apprehended Nikalje at the request of Indian authorities".

The federal police confirmed last month that Nikalje was living in Australia under another identity and had been in discussions with Indian authorities, the spokesperson said, but would not provide further details.

Interpol's website states that Nikalje was born in the Indian city of Mumbai, and was wanted for multiple charges including murder and possession and use of illegal firearms.