Carbon nanotubes based sensors are gaining popularity due to their high selectivity, sensitivity, fast response and recovery time, low operating temperatures and low power consumption. However, due to a strong sp2 carbon-carbon bonding within CNTs, the interaction between defect free CNT walls and gas molecules had been expected to be relatively weak and consequently, the electronic transport properties of the nanotubes are insensitive to the exposure of CNTs to various gas molecules.We therefore study the energetics and electronic transport of the defect interaction with gas molecules using ab initio density functional theory based computational methods. We demonstrate that the adsorption energy as well as electronic transport is affected by the introduction of defects at the surface of the CNTs resulting in improved sensitivity for the gas molecules.