Why do we use terms like taxiwala, tongawala and policewala in Indian English?
Is -wala a recognized suffix in Indian English?
Yes, an Indianism, derived from the Hindustani suffix. However, the scope of the suffix is much broader in actual use – it does not necessarily have to do with 'activity', 'profession' or '(a)vocation'. Someone who habitually totes a cloth bag on the shoulders is a jhoolawala (the one with the bag); you could point to someone wearing a hat and say 'topiwala' (one with the hat); the possibilities are endless!
Nor is it restricted to persons or even animate beings. I'll take the laalwala/ laalwali dress (the dress that is red).
I became interested in the question because I know the Indian word juggernaut with an interesting history that has become a common metaphor in English. Astonishing, etymonline has an entry about wallah. An Indian word that was misunderstood by Europeans and taken for man. That's probably the reason for Indian taxiwala. I just guess it stands for "taxi-man", taxi or cab driver.
Etymonline says: wallah (n.) also walla, Anglo-Indian, from Hindi -wala, suffix forming adjectives with the sense "pertaining to, connected with;" the functional equivalent of English -er (1). Europeans took it to mean "man, fellow" and began using it as a word.