Dengue infections are a significant cause of morbidity and mortality and lead to adverse economic effects in many developing tropical countries. In this study, we estimated the economic burden faced by India during the 2006 dengue epidemic. Costs incurred in managing a cohort of serologically confirmed dengue patients at a tertiary-level private hospital in north India were calculated. The median cost of treatment per hospitalised dengue patient was US$432.2 (95% CI US$343.6-625). A sensitivity analysis was performed to estimate the costs to the health system in India using a regression model. Variables with potentially large variations, including the ratio of unreported to reported cases and of hospitalised to ambulatory cases, the proportion requiring transfusions, loss of economic activities due to loss of workdays and deaths, were used. The average total economic burden was estimated to be US$27.4 million (95% CI US$25.7-29.1 million). Costs in the private heath sector were estimated to be almost four times public sector expenditures. Considerable economic losses (at a macro level) are incurred by developing countries like India during each dengue epidemic. Accurate estimates of the proportions of reported to unreported and of hospitalised to ambulatory dengue cases in India are needed to refine further the estimates of financial burden due to dengue in India