Study involving leader of sect in Red China (7)
I believe the answer is:
dresden
'china' is the definition.
(a type of porcelain)
'study involving leader of sect in red' is the wordplay.
'study' becomes 'den' (term for a study or office).
'involving' is an insertion indicator.
'leader of' indicates taking the first letters.
'in' is an insertion indicator.
The first letter of 'sect' is 's'.
's' put within 'red' is 'resd'.
'den' placed around 'resd' is 'DRESDEN'.
(Other definitions for dresden that I've seen before include "that was notoriously fired" , "Red Ned's in the German city" , "Saxony capital" , "Famous china made at Meissen" , "Decorated china" .)