India's opposition alliance has held a massive rally in New Delhi to protest the arrest of one of its leaders over corruption allegations.

On Sunday, more than 10,000 people took part in what is expected to be the biggest anti-government rally since the alliance was formed.

They protested against the arrest of Delhi Chief Minister Arvind Kejriwal for his alleged involvement in a corruption case over liquor policy.

Kejriwal is a staunch critic of Prime Minister Narendra Modi and is hugely popular among voters in the capital.

The arrest came as the Modi government, which is seeking a third term, and opposition parties are increasingly at odds ahead of the general election that will start in April.

The participants said the government is suppressing opposition groups and they have to protect democracy.

The opposition leader's arrest is affecting India's relations with the United States.

Commenting on the case, a US State Department spokesperson said Washington encourages "fair, transparent, and timely legal processes."

The Indian government hit back at the remark, calling it interference in its internal affairs.