Mohammed Ashar Firdausi (32), a resident of south Kolkata's Ekbalpore area, was arrested after two rounds of questioning, a senior Kolkata Police officer said.
Body of diamond merchant Mohammed Salim (55) with his mouth sealed with tape and strangulation marks around the neck, was recovered from inside his shop in Jakaria Street late on Monday night.
The shop was ransacked and many diamonds were stolen.
"Going by circumstantial evidences, it appeared that the killer was known to Salim and that was why the victim had allowed him inside the shop that night," the officer said.
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