Baidhar Rout alias Badal has sustained bullet injuries in his left leg during the exchange of fires. He was hospitalised.
Two aides of Rout were also arrested, police said.
A handgun, three rounds of ammunition, three motorbikes, a number of motorbike keys and lock breaking instruments were seized from Rout.
Police said that he was involved in looting of cars and robberies in Ganjam, Bhadrak, Balasore, Jajpur, Puri, Khurda and Rourkela.
He had been arrested in 2014 in a car loot case and again engaged in criminal activities after being released on bail.
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