OBJECTIVES:  Incidence of type 1 diabetes mellitus (T1DM) is increasing at a rate of 3%-5% annually in India. Multiple Daily Insulin (MDI) injections and Continuous Subcutaneous Insulin Infusion (CSII) are effective modes of intensive therapy in patients with T1DM. CSII offers better glycemic control but incurs a higher cost as compared to MDI. This is the first-ever cost-effectiveness analysis to compare CSII against MDI in Indian healthcare setting. METHODS:  India specific data were extracted from published literature (MEDLINE, Embase, Cochrane Library). If unavailable, data were adapted or assumed as per the standard guidelines. Analysis was conducted using a Markov simulation model with a time horizon of 8 years. Costs and quality-adjusted life years (QALYs) were discounted at a rate of 3.5% annually. Model outcomes were reported as incremental cost-effectiveness ratio (ICERs) and net benefit. Probabilistic sensitivity analysis was performed using Monte Carlo simulation. RESULTS:  Cost and QALYs gained were higher with CSII (cost INR 9,34,430.89; QALY 2.498) versus MDI (cost INR 1,00,263.73; QALY 1.256) with a net benefit of INR 41,47,638.13. Compared to MDI, an additional cost of INR 6,71,534.69 was accrued with CSII for one year of perfect life gained. The ICER was greater than three times India’s Gross Domestic Product (GDP) per capita (INR 1,10,368.91). CONCLUSIONS:  Compared to MDI, CSII has higher cost but better outcome. Considering greater QALYs gained with CSII, patients can be offered with some measures to reduce the out-of-pocket expense on therapy.