PURPOSE: The aim of this study was to estimate utility values associated with different severity stages of diabetic retinopathy (DR) in India by a direct elicitation method (time-trade off, TTO) and indirectly by questionnaire. METHODS: People with diabetes aged 40 years and over were recruited from an on-going DR epidemiology study and a laser clinic in Chennai, India. Utility values were elicited using the direct TTO method and indirectly through a validated questionnaire (EQ-5D). RESULTS: Of 249 participants, 30 had no DR, 73 had non-proliferative DR, 114 had sight-threatening DR, and 32 were blind from DR (bilateral visual acuity <6/60). The mean TTO utility value was 0.73 (standard deviation, SD, 0.31). TTO utility values decreased with increasing severity of DR (p < 0.001) and were significantly lower among participants with sight threatening DR (0.70, SD 0.33) and blindness (0.55, SD 0.24) compared to those with no DR (0.89, SD 0.25) after adjustment for sociodemographic and clinical factors. Blindness from DR was independently associated with a lower EQ-5D utility value. The utility value derived from EQ-5D (0.06) associated with being blind from DR was substantially lower than that of the TTO utility value (0.55). CONCLUSIONS: This study provides estimates of utility values that can be used in economic evaluations of DR screening strategies in India. The relatively low utility values associated with blindness highlights the importance of screening programs for early detection of the sight-threatening stages to prevent vision loss from DR in this setting.