The actress later apologised for her comment.
Sikkim Tourism Secretary C Zangpo said that Priyanka wrote an e-mail in this regard to Tourism Minister Ugen T Gyatso.
"In no way I wanted to hurt the sentiments of the people of Sikkim. My comment was misunderstood," she wrote.
However, the story did not end there.
In her letter, she also wrote, "I am fully aware that Sikkim is an incredible host nation to so many refugees and our film shows exactly that through the children's point of view."
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The film in question is "Pahuna" in Sikkimese language.
Produced under the banner of Priyanka's production house Purple Pebble, the film is directed by Pakhi Tyrewala and tells the story of two Nepalese children who are displaced because of conflict.
"Pahuna" was premiered at the Toronto International Film Festival (TIFF).
Priyanka, had claimed in an interview with ET Canada that it was the first-ever film to have emerged from Sikkim as it's a "very troubled" region.
"This is a Sikkimese film. Sikkim is a small state in the North East of India which never had a film industry or anyone who made films from there. And this is the first film ever that's come out of that region because it's very troubled with insurgency and troubling situations. I'm very excited," she said in the interview.
Biswatosh Sinha, a screenwriter from Assam, posted, "Dear Priyanka Chopra, Sikkim is a peaceful place and #Pahuna is not the first film from the region. Please get the facts right about Northeast."
One user wrote, "Does she know the difference between Sikkim and othr NE States? This is how India is defamed...."
Gyatso strongly condemned the remarks and said Sikkim is a peace loving state where there is no place for insurgency.
"We are deeply sad with the disappointing comment that Priyanka Chopra made about the state. We strongly condemn her statements," he told newsmen in Gangtok.
The actress had referred to the state as insurgency hit and "Pahuna" as the first film from the region, Gyatso said.
Special Secretary (Information and Public Relations) Namrata Thapa said the state government may form a committee and screen "Pahuna" before its official release.
Chairman of Sikkim Film Board Uttam Reesi Pradhan questioned Priyanka's general knowledge saying, "How can a well read and a responsible person refer to Sikkim in such a way. Sikkim is a part of India which is just general knowledge. If she was not sure about something then she should have referred to some GK books. There has been no refugee problem in Sikkim and she as a youth icon should have known that.