The Bombay High Court said that Aseem Trivedi could be released on bail if he paid 5,000 rupees ($90;Â£67).
But it is unclear if Mr Trivedi will accept bail. He has said he will not hire a lawyer or apply for bail himself until the charges are dropped.
He was detained over cartoons which allegedly mocked India's constitution.
Many Indians see his arrest as an attack on freedom of expression. The cartoonist has been participating in an anti-corruption movement led by campaigner Anna Hazare.
Mr Trivedi was remanded in custody until 24 September when he appeared in court on Monday, two days after his arrest. He refused to apply for bail, and said if telling the truth made him a traitor then he was happy to be described as one.
By Soutik BiswasIndia correspondent
But on Tuesday a member of the public, apparently unrelated to Mr Trivedi, made a bail application to the Bombay High Court on the basis that drawing cartoons was not adequate grounds to be charged with sedition.
In one of a series of cartoons, the customary three lions in India's national emblem are replaced with three wolves, their teeth dripping with blood, with the message "Long live corruption" written underneath.
Another cartoon depicts the Indian parliament as a giant toilet bowl.
Government officials say that while they are in favour of free speech, there is a thin line between that and insulting national symbols, the BBC's Sanjoy Majumder in Delhi reports.
Protesters on social networking sites said it was shameful that corrupt politicians were being let off while those who highlighted corruption were being jailed.
A court in India has granted bail to an anti-corruption cartoonist arrested on sedition charges, after an application from a member of the public.