The man, identified as 26-year-old Nand Lal Meghwal, is a resident of Sangad district in Pakistan and had come to India earlier this month on visa.
"Following a tip off, a team of intelligence personnel caught him from a hotel in Jaisalmer. He had classified information stored in micro SD cards besides photographs of defence installations and vehicles," U R Sahoo, ADG Intelligence, said.
Meghwal, who was arrested last night, was being taken to Jaipur for joint interrogation by intelligence agencies.
"In lieu of smuggling items on cheap rates, he used to collect information about defence and intelligence agencies and their activities and would pass it on to his handlers of ISI," the ADG said.
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The accused used WhastApp, Facebook and Skype for communicating with his sources in the border areas, he added.
Home Minister Gulabchand Kataria said the accused has come to India on visa several times.
Additional SP CID (Intelligence) Rajiv Dutta said the accused had visa for Jodhpur only but he came to visit Jaislamer in violation of the visa norms.