Star Health and Allied Insurance Company, based in the southern city of Madras (Chennai), says the scheme will provide cover of up to $1,100.

Aids activists have hailed the move saying it will bring psychological relief to HIV-positive people.

According to UN-backed official estimates, India has nearly 2.7 million people infected with the HIV virus.

Chief of Star Health, V Jagannathan, says the scheme will be available to HIV-positive patients if they pay an annual premium of 3,000 rupees ($70).

‘Good scheme’

He says once an HIV-positive person is diagnosed with full-blown Aids, they can get the insured sum of money from the firm.

The chief of India’s anti-Aids programme, K Sujatha Rao, told the BBC that the scheme looks “good”.

But, she says, it is essential to work out a payment plan. “Many people may not be able to afford to pay 3,000 rupees every year to buy the insurance cover,” she says.