Feroz Khan, 47, made arrangements on the social networking website with a local businessman and recruited two hospital workers to kidnap the baby just hours after he was born.
The baby's mother, Noori, had complained that her father was planning to sell her child. Police intervened and rescued the baby from Ganga Ram Hospital in New Delhi and returned him to his mother.
"All three people who conspired to sell the child have been arrested and we will be interrogating the businessman who paid the money to buy the baby," said Satish Malhotra, a police officer Ludhiana, northern India.
Police commissioner Ishwar Singh said Gurpreet had a Facebook friend whose wife had fertility problems. The gang settled on a price of Rs 45,000, about $830. Nurse Sunita Rani was found to have Rs 20,500 on her person, while Khan had Rs 24,000.
The station house officer at the Basti Jodhewa police station said Khan had arranged to sell the baby to fund his drug habit.