Indian bomb disposal experts cordoned off a busy flower market in the capital New Delhi Friday after finding an improvised explosive device left in an abandoned bag, police said.
"The site is under a police cordon and we have recovered an IED (Improvised Explosive Device)," a police officer told AFP.
"Everything else including who left the bag there and the kind of explosive inside the bag is a matter of investigation."
Police commissioner Rakesh Asthana told the NDTV news channel the bag was left behind by a customer who visited a shop to buy flowers at the Ghazipur wholesale flower market.
Media reports said police carried out a controlled explosion.
The market in eastern Delhi gets thousands of small farmers, horticulturists and shopkeepers early in the morning.
India is in a heightened state of security ahead of Republic Day celebrations on January 26, when a military parade is due to take place in the heart of the capital.
Police last year detained four men over a minor bomb blast outside the Israeli embassy.
No injuries were reported at the time but the windows of three cars were blown out in the incident which was described by officials in Jerusalem as a terrorist attack.
The Indian capital saw its last major terror attack in September 2008 when a series of bomb blasts in busy, upmarket shopping areas killed at least two dozen people and injured 90 others.