Aseem Trivedi was held in the city of Mumbai over the weekend for his cartoons allegedly mocking the Indian constitution.
He was also charged with insulting the national flag and remanded in police custody until 16 September.
The cartoonist has been participating in the anti-corruption movement led by campaigner Anna Hazare.
India’s media and prominent citizens have condemned Mr Trivedi’s arrest, calling it a “wrongful act”.
“From the information I have gathered, the cartoonist did nothing illegal and, in fact, arresting him was an illegal act,” Chairman of the Press Council of India Markandey Katju told The Hindu newspaper.
“A wrongful arrest is a serious crime under the Indian Penal Code, and it is those who arrested him who should be arrested.”
Mr Katju, a former Supreme Court judge, asked how drawing a cartoon could be considered a crime and said politicians should learn to accept criticism.
“Either the allegation is true, in which case you deserve it; or it is false, in which case, you ignore it. This kind of behaviour is not acceptable in a democracy,” he said.
Senior journalist and the editor of CNN-IBN news channel Rajdeep Sardesai said he found it “amusing, but also very dangerous that you can get away with hate speech in this country, but parody and political satire leads to immediate arrest”.
A former senior police officer and lawyer YP Singh told the Mint newspaper that from “what I have heard, it seems he [Mr Trivedi] can be booked at the most under a law to prevent insults to national honour and not on serious charges like sedition, which attract much harsher punishment”.
If proved, a sedition charge can invite a three-year prison term in India.
The micro-blogging site Twitter was also full of messages criticising Mr Trivedi’s arrest.
Police held him acting on a complaint by a Mumbai-based lawyer who said his cartoons were anti-India.
Earlier this year, a website carrying Mr Trivedi’s anti-corruption cartoons was banned by the police in Mumbai, reports say.
In April, Indian police arrested a professor in Calcutta for allegedly posting on the internet cartoons ridiculing West Bengal Chief Minister Mamata Banerjee. He was later released.