According to Pakistan’s Dawn news agency, local hospital sources said 47 people were injured as a result of the Sunday blast, more than 15 of whom have been reported in critical condition.
The market was full of people shopping for clothes at the time of the blast.
Early reports said it was not clear whether the bomb was remotely controlled or set off by an attacker. Security forces have cordoned off the area and are investigating the incident.
No person or group has claimed responsibility for the attack yet.
Security sources said two suspects were arrested at the scene in connection with the explosion.
Parachinar is the capital of Kurram Agency, which is considered as a sensitive tribal area as it borders three Afghan provinces. It was once one of the key routes for the movement of militants across the border.
Pakistan has been engaged in a major offensive against militant hideouts across the troubled northwestern tribal regions since June 2014, when a deadly raid on the Karachi International Airport ended the government’s faltering peace talks with the pro-Taliban militants.
Pakistan’s army intensified its military operations after militants killed over 150 people, most of them children, in an armed assault on a school in the northwestern city of Peshawar in December 2014.