The van was on its way to the stone quarry from Padbanabham when the police stopped it, acting on a tip-off.
Assistant Superintendent of Police, Narsipatnam, Vishal Gunni said police arrested two persons under various sections of the Explosive Substances Act, while five others, including the owner of the quarry, the supplier of the explosives and the van driver, fled from the spot.
The quarry owner will be questioned, police said, as they suspect that he might have procured the explosives illegally for rock-blasting.