Unlike other low- and middle-income countries, infectious diseases are still predominant, and non-communicable diseases (NCDs) are emerging without replacing the burden of infectious diseases in India, where it is imposing a double burden of diseases on households in the country. This study aimed to analyse the socio-economic and demographic differentials in the magnitude of economic burden and coping strategies associated with health expenditure on infectious diseases in India. National Sample Survey Organization (NSSO) data on “Key Indicators of Social Consumption in India: Health, (2017–18)” have been employed in this study. The findings of the study revealed that more than 33% of the individuals are still suffering from infectious diseases out of the total ailing population in India. Based on the various socio-economic and demographic covariates, infectious diseases are highly prevalent among individuals with marginalized characteristics, such as individuals residing in rural areas, females, 0–14 age groups, Muslims, illiterates, scheduled tribes (STs), and scheduled castes (SCs), large family households, and economically poor people in the country. The per capita out-of-pocket (OOP) expenditure on infectious diseases is INR 7.28 and INR 29.38 in inpatient and outpatient care, respectively. Whereas, monthly per patient OOP expenditure on infectious diseases by infection-affected populations is INR 881.56 and INR 1,156.34 in inpatient and outpatient care in India. The study found that people residing in rural areas, SCs followed by other backward classes (OBCs), illiterates, poor, and very poor are more dependent on borrowings, sale of assets, and other distressed sources of financing. However, under National Health Policy 2017, many initiatives, such as “Ayushman Bharat,” PM-JAY, and National Digital Health Mission (NDHM) in 2021, have been launched by the government of India in the recent years. These initiatives are holistically launched for ensuring better health facilities, but it is early to make any prediction regarding its outcomes; hopefully, the time will define it over the passing of a few more years. Finally, the study proposed the need for proper implementations of policy initiatives, awareness against unhygienic conditions and contamination of illnesses, immunisations/vaccination campaigns, subsidized medical facilities, and the country's expansion of quality primary health-care facilities.