To quantify the economic burden of maternal health care services on Indian households and examine the levels of expenditure incurred in public and private health care institutions at the national, state and community levels. Cross-sectional population data from the 2004 National Sample Survey Organisation were used, which considered 9,643 households for the analysis where at least one woman received maternal health care services during the year preceding the survey. Multilevel linear regression techniques were used to estimate the effect of household, cluster and state characteristics on the proportion of maternal health care expenditures over total household expenditures. Over 80 % of households reported paying for maternal health care services, with those using private care facilities paying almost 4 times more than those using public facilities. Multilevel analyses show evidence of high burden of maternal health care expenditures, which varied significantly across states according to the level of health care utilisation, and with considerable heterogeneity at the household and community levels. Maternal health care services in India are offered free at the point of delivery, yet many families face significant out-of-pocket expenditures. The recent governmental policy interventions to encourage institutional births by providing nominal financial assistance is a welcome step but this might not help to compensate mothers for other indirect expenditures, especially those living in rural areas and poorer communities who are increasingly seeking care in private facilities.