He is being investigated over allegations that he cleared foreign investments in exchange for bribes while he was finance minister.
Mr Chidambaram denies the allegations.
He was arrested by the Central Bureau of Investigation (CBI) on Wednesday evening amid chaotic scenes as supporters and media surrounded his car while being driven away.
The night before, officials arrived at his home in capital Delhi to question him, but said he was not at home.
Hours before his arrest, Mr Chidambaram approached the Supreme Court, a day after the Delhi high court rejected his application for bail. His lawyer told the court that the Bharatiya Janta Party-led government is carrying on a "politically-motivated vendetta" against Mr Chidambaram and his son, Karti, who is also implicated in the case.
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