Raju Pandey, 18, bled to death in a hospital Tuesday evening, police said, adding that the attack was due to road rage.
Pandey's mother alleged that the delay by policemen in rushing him to a hospital cost him his life.
Ashu Mulla, 19, was arrested from the same area in Ambedkar Nagar in south Delhi Wednesday late night.
Police said that Mulla was on his motorbike when his vehicle grazed Pandey and lead to an argument.
"Mulla took out a knife and stabbed him (Pandey) several times and fled from the spot," police said.
A video shot by a passerby showed Pandey lying in a pool of blood on the road while the policemen are talking to him instead of taking him to a hospital.
However, police said the injured was immediately rushed to a hospital after they reached the spot.