According to the police, the incident on a footbridge in the city's Ma On Shan area took place due to a dispute, the South China Morning Post reported.
A video making rounds on social media shows the man assaulted and sprayed with an unknown solution.
As he walks away he shouts, "you are not Chinese". A crowd responds, "we are Hongkongers". He returns after someone hurls abuses at him and a dispute ensues.
The man is then doused with flammable liquid and set alight.
A police source said that the man has been taken to Prince of Wales Hospital in Sha Tin for treatment. He has second degree burns on 28 per cent of his body, mainly on his chest and arms.
On Monday morning, a policeman has shot a protester as demonstrators tried to block a junction at Sai Wan Ho on the north-east of the island. Police confirmed that one officer "discharged his service revolver" and that a man was shot.
The officer fired twice more, but there were no injuries.
After the shooting, footage showed the 21-year old protester lying with his eyes wide open and with blood around him.
He has undergone surgery and remains in a critical condition, a Hospital Authority spokesman told the BBC.
This was the third time a police officer shot someone with live rounds since the Hong Kong protests began in June.
The first incident was during protests on October 1 when China was celebrating 70 years of communist rule. The second case was a teenage boy shot in the leg on October 4.
Meanwhile, police also fired rubber bullets and tear gas in others parts of Hong Kong.
At one point, tear gas was fired in the central business district - a rare occurrence during working hours on a weekday.
While most protests have taken place on weekends, protesters called for a general strike - that is, all workers not to work - on Monday.
Several universities have cancelled their classes for the day.
At some metro stations, activists jammed trains and prevented doors from closing.
Many roads were blocked by makeshift barricades erected by black-clad men who came and went quickly. Various metro stations were closed while train services were delayed.
The latest violence comes after after the death of a 22-year-old university student Alex Chow Tsz-lok on Friday.
He fell from height in a car park on November 3 and suffered serious brain injuries under circumstances that are still unclear.
The Hong Kong protests, which have been drawing massive crowds since June following a contentious proposed extradition law, have mutated into a movement that seeks to improve the democratic mechanisms that govern the city and safeguard the region's partial autonomy from Beijing.
However, some demonstrators have opted for more radical tactics than peaceful civil disobedience and violent clashes with the police have been frequent.
( With inputs from IANS )