BACKGROUND: The human immunodeficiency virus (HIV) epidemic in India is concentrated among 3.1 million men who have sex with men (MSM) and 1.1 million people who inject drugs (PWID), with a mean incidence of 0.9-1.4 per 100 person-years. We examined the cost-effectiveness of both preexposure prophylaxis (PrEP) and HIV testing strategies for MSM and PWID in India. METHODS: We populated an HIV microsimulation model with India-specific data and projected clinical and economic outcomes of 7 strategies for MSM/PWID, including status quo; a 1-time HIV test; routine HIV testing every 3, 6, or 12 months; and PrEP with HIV testing every 3 or 6 months. We used a willingness-to-pay threshold of US$1950, the 2017 Indian per capita gross domestic product, to define cost-effectiveness. RESULTS: HIV testing alone increased life expectancy by 0.07-0.30 years in MSM; PrEP added approximately 0.90 life-years to status quo. Results were similar in PWID. PrEP with 6-month testing was cost-effective for both MSM (incremental cost-effectiveness ratio [ICER], $1000/year of life saved [YLS]) and PWID (ICER, $500/YLS). Results were most sensitive to HIV incidence. PrEP with 6-month testing would increase HIV-related expenditures by US$708 million (MSM) and US$218 million (PWID) over 5 years compared to status quo. CONCLUSIONS: While the World Health Organization recommends PrEP with quarterly HIV testing, our analysis identifies PrEP with semiannual testing as the cost-effective HIV prevention strategy for Indian MSM and PWID. Since nationwide scale-up would require a substantial fiscal investment, areas of highest HIV incidence may be the appropriate initial targets for PrEP scale-up.