The manager of a shop in a Delhi mall saw him sidling up close to several women wearing short skirts and placing his right foot near them.
When confronted, he tried to run away, but was caught by the mall guards who found the camera and called the police.
Police say they have recovered nearly a dozen video clips from his camera.
A complaint has been registered against him for "stalking" and "watching or capturing an image of a woman engaging in a private act".
He fitted the camera in his right shoe and used to place his foot in a particular manner so as to capture obscene photographs of women, Press Trust of India quoted a police official as saying.
During questioning, he is reported to have told the police that he got the idea from some popular websites and purchased the spy camera online, the agency reported, adding that the man had visited the mall on earlier occasions too.
His laptop and mobile phone have been seized and police say they are trying to find out whether he took the photos and video clips for himself or whether he uploaded them on the internet.
The man was later freed on bail, police said.
A 34-year-old Indian lawyer has been arrested for allegedly taking upskirt photos and videos of women with a camera fitted to his shoe, police said.