Kumar, 28, was arrested last month at a rally to commemorate the anniversary of the execution of a Kashmiri separatist.
The court granted the student six months bail on a surety of 10,000 rupees ($150), defence lawyer Vrinda Grover said.
Kumar’s detention — under colonial-era laws once used by India’s British rulers to jail nationalist heroes including Mahatma Gandhi — exposed deep ideological differences over freedom of speech in India.
The case became a cause célèbre among opposition parties and free speech activists, who say India has become increasingly intolerant since Prime Minister Narendra Modi’s government was elected two years ago.
Although Kumar attended a rally questioning the execution of the separatist convicted for an attack in parliament, his lawyers say he rejected the use of violence and he made no incendiary comments.
Instead, his supporters say he criticised a right-wing student fraternity and a Hindu-nationalist umbrella group to which Modi’s ruling party belongs.
The police and government say the student’s jailing was justified because witnesses said he made anti-national comments.
Kumar’s last appearance in court last month led to chaotic scenes as lawyers and supporters of the ruling party assaulted students and journalists.
Some commentators and legal experts fault the government for exploiting the sedition law to silence its opponents, arguing it should instead have left college officials to manage what they say was no more than an exuberant student debate.