Background: According to World Health Organization (WHO) guidelines, which have also been adopted by the National AIDS Control Organization (NACO), India, Efavirenz-based Anti-Retroviral Therapy (ART) is better in Human-Immunodeficiency-Virus (HIV)-infected patients who are also being treated with Rifampicin-based Anti-Tuberculous Therapy (ATT). However, Efavirenz is much more expensive. We hypothesize that Nevirapine is a cheaper alternative that possesses equal efficacy as Efavirenz in HIV-Tuberculosis (TB) co-infected patients. Methods: A parallel open-label randomized clinical trial was conducted at All India Institute of Medical Sciences (AIIMS), New Delhi and National AIDS Research Institute (NARI), Pune. Those who were ART-naïve and co-infected with TB were randomized to receive either Nevirapine (Group 1)- or Efavirenz (Group 2)-based ART along with Rifampicin-based ATT. ATT was begun first in ART-naïve patients according to the NACO guidelines, with a median of 27 days between ATT and ART in both groups. The primary endpoint was a composite unfavourable outcome (death and/or ART failure) at 96 weeks, and the secondary outcome was successful TB treatment at 48 weeks. Results: A total of 284 patients (mean age 36.7 ± 8.1 years) were randomized in a 1:1 ratio to receive either Nevirapine (n = 144)- or Efavirenz (n = 140)-based ART after a median ATT-ART gap of 27 days. The median CD4 count was 105 cells/μl, with a median viral load of 820,200 copies/μl and no significant difference between the groups. Composite unfavourable outcomes were reported in 49 patients in the Nevirapine group and 51 patients in the Efavirenz group (35.3% vs. 36.9%; hazard ratio, 0.95, 95% confidence interval (CI), 0.63,1.43, adjusted). There was no difference in successful TB treatment outcome between the groups (71.5% vs. 65.6%, 95% CI -3.8,17.9, adjusted). The results were similar, showing no difference between the groups in the two centres of the study after adjusting for disease stage. Conclusions: Composite unfavourable outcome in HIV-TB co-infected patients who were ART-naïve showed no statistically significant difference in the Nevirapine or Efavirenz groups.. Therefore, Nevirapine-based ART is a reasonable alternative to Efavirenz in resource-limited settings. However, multi-centric studies with larger sample sizes are required to confirm these findings. Trial registration:NCT01805258(Retrospectively registered on March 6, 2013) Date of registration: March 2013.