According to a new report by research organisation Euromonitor, India has emerged as the sixth largest market for contraband cigarettes in the world.

The study conducted by Assocham said that the market for contraband cigarettes in the country about Rs 2,000 crore per annum, which results is losses to the government and affects the lively hood of millions of tobacco farmers in the country. Te study also warns that illegal cigarettes could be a source of terror activities as well.

A recently study by Euromonitor had said that such cigarettes are priced attractively in the market because their producers do not pay any applicable taxes. Euromonitor claims that India is sixth largest illicit cigarettes market in the world. Its estimates show that about 16 per cent of products of tobacco industry is illegitimate.

According to official figures, the manufacturing of cigarettes has fallen from 109 billion sticks in 2006-07 to 101 billion in 2010-11. However, the illegitimate industry has grown by a whopping 82 per cent from 2004-2011 to 20 billion sticks a year.

Euromonitor has estimated that the illicit cigarette volume is set to rise in the coming years and wll account for 23 per cent of the total industry size by 2016.