SRINAGAR: A gang allegedly involved in illegal trade of counterfeit gold biscuits has been busted and three people have been arrested in Jammu and Kashmir's Budgam district, police said on Wednesday.

The Khansahib police station received information from reliable sources on Tuesday indicating the involvement of a group of individuals in the illicit trade of counterfeit gold biscuits, a police spokesperson said.

Acting on a tip off, a suspect vehicle was intercepted near Gogjipathri crossing in the Khansahib area of the central Kashmir district, he said.

Three people - identified as Fayaz Ahmad Dar, a resident of Malwa Kunzar, and Farooq Ahmad Dar and Shabir Ahmad Dar - both residents of Arizal Khansahib - were in the vehicle, he added.

The spokesperson said 239 gold-like biscuits suspected to be counterfeit were recovered during the vehicle search.

The accused were unable to substantiate the authenticity of the items and were arrested on the spot, he added.

Police said a case has been registered and a probe into the matter has started.

He added the initial investigation suggests that these people were selling these fake gold biscuits to the buyers at exorbitant rates.