Indian opposition leader Kejriwal granted bail

Arvind Kejriwal, an Indian opposition leader and New Delhi's chief minister, has been granted bail by a court in the capital, after he was arrested in a bribery case in March.

Kejriwal, the leader of the Aam Aadmi Party, or Common Man's Party, was arrested in March, weeks before India's general election, in which he was one of the challengers to Prime Minister Narendra Modi.

Modi returned to power for a third straight term earlier in June, even though his Hindu nationalist Bharatiya Janata Party lost its majority.

However, Modi's National Democratic Alliance coalition won enough seats to form a government, with him at the helm.

Kejriwal's arrest was widely condemned by opposition parties who called it a political move by Modi's government against one of his fiercest opponents during a general election.

The New Delhi leader was given interim bail last month to campaign before going back to jail on June 2.

He is expected to be released on Friday, one of Kejriwal's lawyers told local media.

On March 21, Kejriwal was arrested by the federal Enforcement Directorate, India's main financial investigation agency.

The agency, controlled by Modi's government, accused his party and ministers of accepting one billion rupees ($A18 million) in bribes from liquor contractors nearly two years ago.

The arrest triggered days of protests by party activists supported by other opposition parties.

Kejriwal denied the accusations and called them a political conspiracy.

His party is part of a broad alliance of opposition parties called INDIA, which was the main challenger to Modi during the election.

While the federal agency accused Kejriwal of being a key conspirator in the liquor bribery case, the opposition parties accused the government of misusing federal investigation agencies to harass and weaken its political opponents.

They pointed to a series of raids, arrests and corruption investigations of key opposition figures in the months before the election.

Modi's government denies using law enforcement agencies to target the opposition and says the agencies act independently.

Kejriwal, a former civil servant, launched the AAP in 2012.

He promised to rid the Indian political system and governance of corruption and inefficiency.

The party's symbol - a broom - and its promise to sweep the administration of graft struck a chord with New Delhi's residents, fed up with runaway inflation and slow economic growth.