India's anti-terrorism agency is leading the investigation into a car blast in the capital, as the death toll has risen to 12.

Prime Minister Narendra Modi has vowed that those responsible will face justice.

The explosion occurred on Monday evening near the historic Red Fort, one of India's most well-known landmarks and the site of the annual prime minister's Independence Day speech.

Police have not yet determined the exact cause of the blast, which took place in the crowded Old Delhi quarter.

The incident is significant due to its timing.

It came after police arrested a gang and seized explosive materials and assault rifles earlier in the day.

The arrested men are reportedly linked to the Pakistan-based Islamist group Jaish-e-Mohammed and Ansar Ghazwat-ul-Hind, a Kashmir offshoot of Al-Qaeda, both of which are listed as terrorist organizations by India.

Home Minister Amit Shah has instructed officials to hunt down each culprit behind the incident.

This explosion follows another significant security event on April 22, when 26 mainly Hindu civilians were killed in Indian-administered Kashmir, leading to clashes with Pakistan.