NIA officials said that Ran Singh was arrested by the Custom Department from the Thar Express in Rajasthan while he was travelling from Pakistan to India with fake notes worth Rs 94,000.
Thar Link Express runs on the Indian side between Bhagat Ki Kothi railway station in Jodhpur to Munabao.
Passengers say they were told in Karachi that this was the last journey of the train but wish that the train should continue running and not be stopped.
The railways run the train on Sundays from Delhi to Attari and back, while Pakistan used to run the train between Lahore and Attari.
Thar Express from Pakistan reached India on Saturday afternoon, while the Karachi-bound train is on its way to the neighbouring country, officials said.
The passengers are currently undergoing customs clearance following which it will move towards zero point station which is on the International Border, they said.
The train has been running between Jodhpur's Bhagat ki Kothi station to Karachi every Friday night since services resumed on February 18, 2006 after a 41-year suspension.