Satendra Siwal, who was working for India's foreign ministry in Russia, was arrested in the north Indian city of Meerut, Uttar Pradesh.
The Anti-Terrorist Squad (ATS) of Uttar Pradesh said the suspect was allegedly involved in anti-India activities, which included sharing confidential information with Pakistan's intelligence agency ISI.
The authorities allegedly received inputs that Pakistan's ISI handlers had lured India's foreign ministry employees with financial incentives to leak secrets regarding the Indian army. Mr Siwal has been working at the Indian embassy in Moscow since 2021.
"The ATS developed this information and through electronic surveillance and evidence collection, and it was found that Satendra Siwal ... was involved in this," the police said in a statement, according to The Indian Express.
Mr Siwal allegedly provided classified information about the army and military activities to Pakistan in exchange for money.
The suspect was arrested after he failed to provide "satisfactory answers about the information sent by him" and later "confessed to his crime" upon further interrogation, police said.
His belongings, including two mobile phones, identity proofs and Rs 600 (£5.7) were seized during the operation, the ATS said.
A case has been registered against the suspect under the Officials Secrets Act.
India's foreign ministry said it was aware of the arrest of Mr Siwal and would continue to assist the investigative authorities in the case.
Last year, a man of Pakistani origin who had been living in India as a citizen for 17 years was arrested on espionage charges.
Labhshankar Duryodhan Maheshwari, 53, was arrested for allegedly helping Pakistani agents access an Indian SIM card, which they used to hack the phones of Indian defence personnel’s children in army schools, according to local media reports.