Banerjeee, 49, whose account of her escape from the Taliban in 1995 grabbed world attention and was later made into an Indian movie, was gunned down last Thursday after being taken from her home in Paktika province.
The provincial police chief told the BBC the two suspects being held are members of the Haqqani militant network.
Banerjee, a Calcutta resident who had moved to Afghanistan in 1989 after marrying an Afghan businessman and had recently returned to that country to be with her husband after escaping from the Taliban in 1994, was struck by more than 20 bullets outside her home in the provincial capital Sharana. Before taking the victim out of her home, the insurgents had tied up her husband and other family members.
Police told the BBC the two, who were arrested based on intelligence information, were found in possession of two Kalashnikovs, a motorbike and explosives. One official said both are Afghans from near where Banerjee lived and that the two had confessed to being involved in her killing.
Police said Banerjee, also known as Sayed Kamala, had been working as a health worker in the province and had been filming the lives of local women as part of her work.
The Taliban had denied involvement in Banerjee's killing.
The New York Times quoted Paktika police chief Dawolat Khan Zadran as saying the two suspects, both about 28 years old, had said they killed Banerjee for writing about the Taliban, and because "she had installed some Internet connections in her house, and they had to kill this woman for that."
Banerjee grew up in a Hindu family in India but reportedly converted to Islam after marrying her Afghan husband.
In her account, "A Kabuliwala's Bengali Wife," Banerjee described her escape from the Taliban. Prior to her escape, she had been running a health clinic that the Taliban had ordered her to close. She had noted that life in Afghanistan was tolerable in the beginning but after a Taliban crackdown in 2003, she was not allowed to operate the clinic.
Earlier, the Times reported after the Taliban regime was overthrown, she had been traveling between Afghanistan and India.
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