Multidrug-resistant tuberculosis (MDR-TB) challenges TB control efforts because of delays in diagnosis plus its long-term treatment which has toxic effects. Of TB high-incidence countries, India carries the highest burden of MDR-TB cases. We describe policy issues in India concerning MDR-TB diagnosis and management in a careful review of the literature including a systematic review of studies on the prevalence of MDR-TB. Of 995 articles published during 2001–2016 and retrieved from the PubMed, only 20 provided data on the population prevalence of MDR-TB. We further reviewed and describe diagnostic criteria and treatment algorithms in use and endorsed by the Revised National TB Control Program of India. We discuss problems encountered in treating MDR-TB patients with standardized regimens. Finally, we provide realistic suggestions for policymakers and program planners to improve the management and control of MDR-TB in India.