The blaze erupted at building number 1810, a four- storeyed structure in Bhagirath Palace market, which sells electrical and electronics items, at around 5:10pm and spread to an adjacent building.
The fire was brought under control after an hour.
Fire and police officials said there was no casualty or injury in the incident and that none was trapped inside the building.
Eye-witnesses said two persons, who were inside the building when the fire broke out, came out using ropes.
Delhi Fire Services Director A K Sharma said they have no information about anyone being trapped inside the building.
He refused to speculate on the cause of the fire but rescue workers said they suspected short circuit to be the reason.
Around 40 to 50 shops in the two buildings were damaged in the fire, eye-witnesses said.
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Rescue workers evacuated people and barricaded the area to ensure smooth fire-fighting operations. However, congested lanes in the locality hindered fire fighters.
"The fire broke out in a godown of electrical items. It is a 200 square yard godown. There were lot of inflammable plastic and PVC material. The structure is depleted due to age. It might have developed cracks. There was a possibility that the structure may collapse.
"We were not able to enter the building as it was a huge fire and there was a fear that the building may collapse. We prevented the fire from spreading," Sharma said.
Power supply to the area has been snapped as a precaution.
Taj Hassan, Joint Commissioner of Police (Central), said the fire was brought under control within 30 minutes and there was "no cause for worry". The response of the fire brigade was "very good", he added.
Bharat Ahuja, Vice President of Delhi Electrical Traders Association, said the fire started in the second floor of the building and spread to other floors and adjacent building.