It is the phenomenon in which a change of current in a coil causes an induced emf in an another coil placed near the first coil. The coil in which the current is changed is called primary coil and coil in which emf is induced is called secondary coil.
EXPLANATION
Consider two coils placed close to each other as shown in the figure. When the current is passed through the primary coil, the magnetic flux is produced. This magnetic flux is also related to the secondary coil. If the current is changed by varying the resistance of the primary circuit, the magnetic flux change also. This stream of change is connected to the secondary coil, it induces an electromotive force in it. This phenomenon of induction GEF in a coil by changing current in an other coil is known as mutual inductance.