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The capital market in India refers to the market for long-term financial instruments, such as equities (shares) and bonds. The main function of the capital market is to provide a channel for the flow of savings from households and businesses to the government and corporates, who can use these funds for investment and growth.

The capital market in India comprises two main segments: the primary market and the secondary market.

The primary market is where new securities are issued and made available for the first time to the public. This is done through the process of initial public offerings (IPOs), in which companies raise capital by selling shares to the public. The primary market is also used by the government to raise funds through the sale of bonds.

The secondary market is where securities that have already been issued and are in circulation are bought and sold. The main institutions that operate in the secondary market are stock exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). The BSE is the oldest stock exchange in Asia, while the NSE is the largest stock exchange in India by market capitalization.

The share market, also known as the stock market, is a sub-segment of the capital market where shares of publicly listed companies are traded. The share market plays a crucial role in the economy by providing an avenue for companies to raise capital and for investors to earn returns on their investments. It also serves as an important source of information about the performance and prospects of companies, which helps to allocate capital efficiently.