At least 58 people were killed. Scores more people were injured in the three blasts that sent shards of glass, wood and masonry flying. Police declared a state of emergency last night and ordered all the markets in the city closed.
Manmohan Singh, India's Prime Minister, called the blasts "dastardly acts of terrorism" and urged people to remain calm. Mr Singh added: "We will not allow them to succeed. We are resolute in our commitment to fighting terrorism in all forms."
Shopping areas across the city were closed amid fears of further blasts and the Home Minister, Shivraj Patel, called on people to stay away from the affected areas and remain at home.
"It is something that has been planned, that is quite obvious," Sheila Dikshit, the Chief Minister of Delhi's state government, said.
The first explosion occurred in Paharganj, the most crowded neighbourhood in the entire city, lying close to Delhi's railway station and a favourite hangout for Western backpackers. As the city's red light district and a cheap shopping neighbourhood, Paharganj is always crowded.
But Tuesday is Diwali, the most widely celebrated Hindu festival. This year it closely coincides with the end of Ramadan, when Muslims present gifts, and as a consequence the narrow streets were far busier than normal.
Witnesses spoke of seeingcharred bodies being pulled from the wreckage, while survivors emerged covered in blood. At least 60 people were hurt in Paharganj alone.
People rushed to the scene to help their loved ones. Many Indians cannot afford mobile phones, so the only way to check if their relatives had survived was to hurry to the scene themselves. Police had to beseech the crowds to disperse so that ambulance crews could get through to the wounded.
A second explosion went off only moments later, this time in the Sarojini Nagar market, another of the city's most crowded shopping districts and home to countless electronics stores, clothing shops and fast-food restaurants.
Satinder Lal Sharma, a market stallholder, said some boys warned him about an unclaimed bag near a tree and he "started shouting 'Run! Run!'" just before the explosion.
Firefighters rushed to the scene as a thick cloud of black smoke descended like a pall over the wounded. The charred remains of Tuk-tuk auto-rickshaws sat by the street.
Govind Singh, who sells wallets and toys from a cart next to a juice shop devastated in the explosion, said: "I took out at least 20 bodies, most of them were children."
He and others wrapped the dead in sheets that were being sold by one of the shattered shops.
Meanwhile, a third bomb had been detonated on a bus in the suburb of Govindpuri, an industrial area on the southern outskirts of the capital. Three people are reported to have been killed, but few details were available.
At one of the main city hospitals, an accident and emergency doctor said four victims of the first blast were dead on arrival. They were treating another 30 injured from the same explosion, he said.
There have been reports that an alert was issued in India recently following a tip-off from the United States that Islamic militants were planning attacks on American targets in India. India, though, is home to a plethora of violent militant groups, including tribal separatists and Maoist revolutionaries.
What arouses most fear among inhabitants of the ethnically diverse Indian capital is that violent reprisals can be easily triggered against different groups as a result of one of India's religious communities being blamed.
Clearly anxious for the security of India's huge Muslim population, Pakistan, India's neighbour and bitter rival, swiftly condemned the bombings.
The British Foreign Secretary, Jack Straw joined the condemnation. " This is yet another example of terrorists' cynical and callous disregard for human life. On behalf of the British Government, I would like to offer the people of India my support and deepest sympathy."Reuse content