Police said they have arrested DGCA official Pradeep Kumar, pilot Pradeep Tyagi and two touts. One of them has been identified as Lalit Jain.
With the fresh arrests, a total number of 10 people have been taken into custody in connection with the racket.
Acting tough against pilots obtaining their commercial licences by submitting fake records and documents, DGCA had recently grounded 14 pilots.
A person is eligible to fly a commercial aircraft only when he or she secures a CPL, which is given out after a person completes 200 hours of flying during the training.
However, the 14 pilots whose licenses have been revoked had allegedly not flown the mandatory hours and are alleged to have got fake certificates from a Rajasthan flying training institute.
DGCA chief E K Bharat Bhushan had recently told PTI that the CPLs of around 10,000 pilots was under the scanner, besides about 4,000 holders of Airlines Pilots Training License (ATPLs).
He had also said that DGCA would conduct third-party audit of all the 40 flying schools in the country in the wake of cases of forgery behind securing of licences coming to light.
Describing as serious the issue of some pilots getting licenses on the basis of forged marksheets or through illegal means with the help of flying schools, Government has vowed not to show any leniency.
"There are about 40 flying schools. Now there is an audit of these schools... Blanket order has been given to go ahead into the complaints. There is no leniency to anybody," Civil Aviation Minister Vayalar Ravi had said.
"This is a big fraud playing with human lives. There will be no leniency to anybody. We will go very strongly by abiding with the laws. Every angle would be looked into. The issue is very serious," he had said.
The Minister said the Director General of Civil Aviation(DGCA) had discussed the issue with him "more than once" and steps are being taken to address the issue.
Bharat Bhushan, the Director General in DGCA, said essentially there are two types of frauds in regard to fake pilot licenses.
One type of fraud related to not passing the Commercial Pilot License (CPL) exam and producing false marksheet to procure the flying license while the other related to flying schools crediting flying hours in certificates which has actually not been undertaken by the persons concerned, he said.