The top politician in India's capital New Delhi was arrested on Thursday in a graft probe his supporters say is aimed at sidelining opponents to Prime Minister Narendra Modi ahead of national elections.

Arvind Kejriwal, Delhi's chief minister and a key leader in an opposition alliance challenging Modi in next month's polls, was detained after several hours of questioning by the Enforcement Directorate, India's main financial crimes agency.

Kejriwal's government has been accused of corruption in the allocation of private liquor licenses and a probe in the matter has already seen two of his top allies jailed.

Delhi education minister Atishi Marlena Singh confirmed the arrest and said Kejriwal remained the state's chief minister.

"We made it clear from the beginning that if needed, Arvind Kejriwal will run the government from jail," she said.

She described his arrest as a "political conspiracy" orchestrated by Modi's ruling Bharatiya Janata Party (BJP).

"I want to tell Prime Minister Modi that Arvind Kejriwal is not just a human but an idea," Singh said. "If you think that by arresting one Arvind Kejriwal you can finish that idea, you are wrong."

She also said Kejriwal's Aam Aadmi Party (AAP) was seeking a court intervention to quash the arrest.

"We have asked for an urgent hearing by the Supreme Court tonight itself," Singh posted Thursday on X, formerly Twitter.

Several angry supporters gathered in front of Kejriwal's home and shouted slogans, as security forces looked on. (AFP)