Vagrant we held in capital (3,5)
I believe the answer is:
new delhi
'capital' is the definition.
(capital of India)
'vagrant we held in' is the wordplay.
'vagrant' indicates an anagram (vagrant can mean wandering around).
'we'+'held'+'in'='weheldin'
'weheldin' is an anagram of 'NEW DELHI'.
(Other definitions for new delhi that I've seen before include "foreign city" , "Indian capital city" , "Asian capital city" , "Gambling establishments" , "Strangely, end while in India" .)