I have created a shape with "Blend" option in Illustrator (below).Now I am trying hard to replicate that in Inkscape. Is there any way/option to do that in Inkscape? I have searched a lot with "Blend tool in Inkscape", but what I have found did not help me to solve the issue.
The equivalent in Inkscape is an extension called Interpolate. From the main menu it's located at Extensions > Generate from Path > Interpolate.
You need to have two paths selected to use it. Shapes such as circles, polygons, or rectangles need to be converted to paths first, using Path > Object to Path
Edit: Please note however: I can think of better ways to make such shapes without using the Interpolate extension. A simple shape filled with a gradient would have a much smaller file size when saved as an SVG.