Peste des petits ruminants (PPR) is an economically important livestock disease which affects a vast section of the small ruminant population in India. However, data on the incidence of PPR are limited and scant literature is available on the economic losses caused by the disease. In the present study, a structured sampling design was adopted, which covered the major agro-climatic regions of the country, to ascertain the morbidity and mortality rates of PPR. Available estimates of the economic losses in India due to various livestock diseases are based on single values of various epidemiological and economic parameters. Stochastic modelling was used to estimate the economic impact of PPR. Overall annual morbidity and mortality rates of PPR for small ruminants in India have been estimated from the sample as being 8%and 3.45%, respectively. The authors have analysed variations in these rates across species, age group, sex, season and region. The expected annual economic loss due to PPR in India ranges from as little as US $2 million to $18 million and may go up to US $1.5 billion; the most likely range of expected economic losses is between US $653 million and $669 million. This study thus reveals significant losses due to the incidence of PPR in small ruminants in India.