Indian police have arrested a man accused of running a bogus embassy from a rented residential building near the capital, New Delhi, and recovered cars with fake diplomatic plates.

The suspect impersonated an ambassador and allegedly duped people for money by promising overseas employment, senior police officer Sushil Ghule, of an Uttar Pradesh special task force in northern India, said.

Harshvardhan Jain, 47, allegedly claimed to be an adviser or ambassador to entities such as “Seborga” or “Westarctica”.

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Police recovered multiple doctored photographs showing Jain with world leaders, and fake seals of India’s foreign ministry and nearly three dozen countries, Ghule said.

Jain was also suspected of illegal money laundering through shell companies abroad, he said.

He is also facing charges of forgery, impersonation and possessing fake documents.

Police recovered four cars bearing fake diplomatic plates and nearly 4.5 million Indian rupees ($A79,103) and other foreign currencies in cash from Jain’s rented premises, which were adorned with international flags of several nations.