A complaint from the 36-year-old man's ex-wife initiated the arrest.
Indian cops spent several hours quizzing Qureshi and are now on a prowl to obtain video recordings of the meeting at which the deal was supposedly brokered, reports The Sun.
Rubina's mother Khurshida claimed she knew two weeks ago of the intended child-trade with a rich Dubai sheikh.
However, she added: "My elder daughter had informed me...I did not believe he would actually go through with it."
Khurshida dubbed her ex-hubby and his new wife Mina as 'money-crazy' and desperate to cash-in on the nine-year-old's fame.
Police official Prakash Salunke, who is leading the investigation, said: "Khursida was very upset by the media reports and she came to lodge a complaint.
"We are registering her grievance and then we'll investigate and decide what further steps should be taken in the matter. When we questioned Rubina she said she does not want to go anywhere and wants to live with her father.
"Similarly, Rafiq Qureshi also said he has no intentions of selling her."
Christian Colson, the producer of Slumdog Millionaire, said:
"Our friends and colleagues in Mumbai are trying to speak with Mr Qureshi to get to the bottom of what happened."