The 46-year-old was arrested outside the American embassy in Chanakyapuri area.
The accused has been identified as Zhang Hang, who belongs to Chong Qing city in China, the police said.
"Hang was apprehended on July 7. His passport was checked and it was found that his visa was valid till October 2011. He could not converse with us as he did not know Hindi or English,’’ said a senior police official.
"He was taken to Chinese embassy and his passport was given to the Consular Jiang Shang who said that he has a valid passport but did not have a valid Indian visa," the police official added.
A case under Foreigners Act has been registered against him at the Chanakyapuri Police Station and further investigations are on.