Abacavir is currently recommended as a part of first line regimen by National AIDS Control Organization. The objective of this study was to observe the incidence of clinically diagnosed abacavir Hypersensitivity reaction (HSR) among children on abacavir based therapy in the National program. In this observational study, all children started on abacavir were included and HSR reaction was diagnosed clinically as per National guidelines. HLA- B5701 testing was done in children diagnosed with clinical abacavir HSR. Among 101 children started on abacavir during the study period, 8 [7.9 % (95 % CI 3.5-15.0 %)] children developed clinically diagnosed abacavir HSR. All children with concomitant illness (4/8) were HLA-B5701 negative. Only 2 (25 %, 2/8) carried HLA-B5701 allele. Fever with abdominal symptoms as compared to respiratory symptoms were more common in HLA-B5701 positive cases. Overdiagnosis of clinically diagnosed abacavir HSR is common and could be decreased by treating concomitant illness before starting abacavir.