Though there was no immediate report of any casualty, officials feared that crackers worth lakhs of rupees have been damaged in the blaze.
Eyewitnesses said the fire might have been triggered by an electrical short-circuit.
A spokesman of the fire department said several fire tenders are engaged in dousing the flames.
The cracker market is organised every year during Diwali in this locality on the outskirts of the national capital.
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