These days many laptop devices come with a touchpad that have sensor next to them.
By double clicking these sensor (or single clicking on some of them) the touch pad is disabled until the sensor is double clicked again. However, this happens only in Windows.

Ever since I have switched to Linux (using Arch Linux this time) this shortcut method does not work.

Although I have seen a couple of scripts to disable touchpad and some packages available on the internet, it's good to be able to have it done by an easy method as using the in-built sensor.

Anyone knows how we can do this?

At first I would check which messages this sensor sends. Is it registered as a mouse button or does it trigger keyboard events?
You can check this with the xev command, start it and click the sensor to see which events are generated.

XEV is, perhaps, distribution dependent. It doesn't run on Arch, neither is it available in official repositories.

In Arch xev is part of the package xorg-xev from the Extra repo.