The most common and most likely answer to this crossword clue is the 6 letter word MIHRAB
M
I
H
R
A
B
Buddy explains!

The straight part
We know that "Niche" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case niche = mihrab.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.
What does MIHRAB mean?
MIHRAB noun- A niche in a mosque that indicates the qibla (direction of Mecca), and into which the imam prays
- A design in a Muslim prayer mat with the same function