Background Neonatal healthcare-associated infection (HAI) globally is the leading preventable cause of neonatal mortality. Neonatal mortality in India is also very high. Considering that HAIs can be prevented globally, there are disparities in resources; the current study aimed at developing locally feasible and effective prevention bundles for neonatal HAIs. Methods A mixed-method study was conducted at one tertiary care teaching hospital's level IV Neonatal Intensive Care Unit. The study explores the causes of neonatal HAIs, current processes, benchmark practices, gaps in current practices with HAIs, root-cause analysis and system process mapping, and failure mode effect analysis. Observations, interviews, brainstorming activities, and a survey were conducted. Written and audio-video recorded prevention bundle was developed and implemented using a quasi-experimental study design. Results Process standardisation, healthcare worker training, hand hygiene practices, nursing care process and vascular access process were identified as key improvement areas to prevent neonatal HAIs. Out of eighteen identified processes, three processes were standardised. All the healthcare providers were trained at three-time intervals of three months each. After implementing the prevention bundle, there was a significant decline in the rate of HAIs, reducing it from 9.6 to 7.0 per 100 admissions >48 hours. The bacteraemia rate fell from 5.2 per 1000 patient days to 2.6 per 1000 patient days and was statistically significant on a two-tailed student t-test with 95% CI with p-value=0.00073. Conclusions Our developed prevention bundle for neonatal HAIs was significantly effective and reproducible for healthcare workers' training and development. Considering variations in global infection control practices and resources constraint, it is effective to develop a local prevention bundle for neonatal HAIs.