
“The site is under a police cordon and we have recovered an IED (Improvised Explosive Device),” a police officer told AFP.
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“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.
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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.
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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.
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