New Delhi spends about 5 percent of its $5.4 billion healthcare budget on treating AIDS patients.
India with 2.5 million patients is among the top three countries with the highest number of HIV cases, alongside South Africa and Nigeria.
But with HIV cases showing signs of rising in the capital New Delhi, in the financial hub of Mumbai, in the north and the northeast, the cost of treatment in India could rise to $1.8 billion by 2020, about 7 percent of the total health expenditure, the World Bank says.
This would pose an enormous burden on the health care services and the budget in a country where malaria still kills hundreds of people every year and other health-sector challenges like non-communicable diseases are as sharp as AIDS, experts say.
More than 15 percent of the 200,000 plus injectible drug users (IDUs) are HIV positive in the country against a global average of 10 percent, AIDS experts say.
In some areas, HIV positive cases among IDUs have been found to be as high as 50 percent, health ministry officials quoting an ongoing survey said.
This rise could fuel the spread of AIDS unless checked, aid agencies say in their reports.
What we are worried about, are the concentrated epidemics in the country, among vulnerable groups in districts, said Mariam Claeson, World Bank Program Coordinator (HIV/AIDS).
Those concentrated epidemics can act as wildfires, and therefore need to be targeted with effective prevention efforts, Claeson, an expert on AIDs in South Asia, told Reuters.
Injecting drug users are infected by the virus by sharing needles with an HIV-infected person, and passing it on by having unprotected sex.
The World Bank says the poor risk getting poorer in India as AIDS patients get marginalized and face income loss due to their HIV status.
The World Bank quoting a recent study says in its report that about 36 percent of people living with HIV/AIDS in India reported an income loss and increased expenditure on treatment.
HIV is not a major threat to the current economic growth of India, but the welfare impact is significant and HIV disproportionately affects the poor, Claeson said.