Shah Mudassir alias Talha (25) and Shoeb Ahmed Khan alias Pusad Shoeb (24) were arrested in Secunderabad on their arrival.
Police seized mobile phones, literature on explosive formulae and jihad, pen drives, CDs containing militant training programmes, passports and other documents from them.
Police claimed they had come to Hyderabad on the request of a man named Motasim Billah, who had motivated them during their visit to the city last month to go to Afghanistan to get training from the Al Qaeda in order to wage jihad in India to establish an Islamic State.
Mothasim, son of cleric Moulana Islahi, had even offered financial support to the duo for visa processing.
A police officer said Mudassir is a member of the banned Students Islamic Movement of India (SIMI) while his friend Shoeb is an associate of Mansoor Ali Peerboy, media in-charge of the Indian Mujahideen, Pune module.
Police described Shoeb as a strong jihadist, who is also tech-savvy.
The youngsters, who are adept in using social networks to propagate jihad, came in contact with Abu Saif and Kamaran Sha of Pakistan, Zahid Al Hindi of Afghanistan, Mir Showkath, Sameer Khan and Mothasim Billah.
Kamaran Sha shared literature through Facebook "on explosives wherein three methods of explosive manufacturing from the locally and easily available chemicals was narrated.
In the said literature, Kamaran Sha motivated both these people to manufacture bombs and cause blasts in Maharashtra and he will feel happy to see the news of triggered bomb blast in India", police said.