In 2005 and again in 2011, the Government of India launched schemes to encourage institutional delivery among poor women, with the aim of improving maternal and newborn health outcomes. Partly as a result of these initiatives, the proportion of children born in a health facility rose steeply from 42% in 2000–2005 to 81% a decade later. In this context, the objective of this paper was to determine the association between place of delivery (public sector, private sector, home) and early neonatal mortality, defined as death in the first 7 days after birth. The focus was on early neonatal mortality because over half of all under-five deaths occur in his period and because the protective effect of an institutional place of birth should be strongest in those few early days. Both bivariate methods and multivariate logistic regression analysis were applied to data from the fourth round of the National Family Health Survey conducted in 2015–16. For the country as a whole, it was found that the adjusted odds of death in the early neonatal period were lower for deliveries in public health facilities than for home deliveries (OR 0.833 p<0.01), but no significant difference was found between deliveries in private health facilities and at home. Adjusted odds of death were higher for deliveries in private than public sector facilities (OR 1.41 p<0.01). On further investigation, for the poor in Bihar and Uttar Pradesh, it was found that the risks of dying in the early neonatal period were even higher for babies delivered in private health facilities than for home deliveries with adjusted odds of over 2.0. These results raise serious questions about quality of care in the private sector in India. In the context of increased emphasis on public–private partnerships in health services provision in the country, it becomes imperative to enforce better inspection, licensing and quality control of private sector facilities, especially in the states of Bihar and Uttar Pradesh.