The most common and most likely answer to this crossword clue is the 4 letter word AGRA
I've seen this crossword clue in The Daily Telegraph
A
G
R
A
More clues leading to the result AGRA
- Moguls' capital invested in bargains from the east
- Marketplace abandoned by old Indian city
- Located in India, grand site of famous building
- Part of Calcutta, grand Indian city
- Turkish commander crossing river in Indian city
- Where you can see Asia’s grandest royal abode, primarily?
- City that can be stimulating after six
- Odd characters from Algerian city
- Indian place put starter of rice in oven
- Silver god’s mausoleum site
Buddy explains!

The straight part
We know that "setting for a famous sight" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case setting for a famous sight = agra.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.