Introduction: Early infant diagnosis (EID) confers substantial benefit to HIV infected and HIV uninfected infants and to programmes providing prevention of mother to child transmission (MTCT), but has been challenging to implement in resource limited settings. Objectives: To find out the rate of perinatal transmission in infants born to HIV positive mothers, to study the effect of various predisposing factors on HIV transmission and to evaluate the utility of dried blood spot (DBS) specimen for EID of HIV. Methods: Infants born to HIV positive mothers were tested according to National AIDS Control Organization (NACO) guidelines. Infants of 6 weeks to 6 months of age (n = 84) were diagnosed by DBS PCR; DBS positive results were confirmed by whole blood PCR. Infants 6 - 18 months (n = 47) were subjected to antibody test and if positive were confirmed by DNA PCR. Detailed history including type of delivery, single dose nevirapine (SDN) and breast feeding was taken. Results: The HIV transmission rate was 10.69%. In children ≤ 6 months, who did not receive SDN the positivity was 44.44% (4/9) whereas in those who received SDN it was 6.66% (5/75), (P = 0.0063). In children > 6 months the positivity rate was significantly higher in breast fed 42.85% (3/7) as compared to non breast fed 5% (2/40) children (P = 0.0187). There was 100% concordance between DBS and whole blood PCR. Conclusions: In resource limited settings, though HAART should be considered to further reduce MTCT during pregnancy and to prevent the emergence of resistance, SDN should be kept as an option for mothers coming directly in labour. Also, extended ART should be provided to mothers who want to breast feed their children. Early infant diagnosis using DBS specimens will further reduce the morbidity and mortality in these children