Note I'm enthralled by Indian instrument and sword (8)
I believe the answer is:
scimitar
'sword' is the definition.
(scimitar is a kind of sword)
'note i'm enthralled by indian instrument' is the wordplay.
'note' becomes 'c' (musical note).
'enthralled by' is an insertion indicator ('enthral' can mean 'capture').
'indian instrument' becomes 'sitar' (I've seen this before).
'c'+'im'='cim'
'cim' going within 'sitar' is 'SCIMITAR'.
'and' acts as a link.
(Other definitions for scimitar that I've seen before include "sharp weapon" , "Type of sword with curved blade" , "Curved oriental sabre" , "Double-edged sword" , "Eastern sword" .)