The incident took place last evening and the accused, identified as Amit, managed to flee for the spot, police said.
"Amit had allegedly molested the 35-year-old woman in the beauty parlour. The woman was in India on a business visa and staying for past two months at East of Kailash," said a senior police official.
Last evening, she had gone to a parlour situated at M Block of Greater Kailash for a hair cut where Amit attended her, and while give a massage to her head he started molesting her, prompting her to raise an alarm, the official said.
The police then contacted the owner of the parlour and also raided the residential address of the accused in Sangam Vihar but he was found absconding.
He was finally arrested from a hideout today.
The US embassy was informed about the developments while police was trying to find out whether the accused was involved in other such cases in the past, the officer added.