The aim of the study was to estimate the direct family costs of Type 1 diabetes in India. The study was carried out with the participation of the families of 209 Type 1 DM patients (M:F 126:83, mean age 26.6+/-12.7 years). The annual family income varied from Rs. 10,000 to 600,000/- (US$ 212-12,765) with a median of Rs. 60,000/- (US$ 1276). A median figure of Rs. 13,980 (US$ 310) was spent annually on diabetes by the families of patients; range Rs. 2046-87,150 (US$ 45-1936). Fifty six percent of patients were not earning. The median percentage of income spent on diabetes was 22% for the entire group, varying from 59% in the low socioeconomic group, 32% in the middle socioeconomic group, 18% in the upper middle income group and 12% in the high-income group. Patients managed on an outpatient basis alone incurred an expenditure of 16% of income while 23% of income was spent on those requiring hospitalisation.