"India's rich tradition of inclusivity and social justice must include men who have sex with men and transgender people," Michel Sidibé, UNAIDS executive director, said in a statement.
"There is no place for stigma and discrimination on the basis of sexual orientation. Consistent with WHO's disease classification, UNAIDS does not regard homosexuality as a disease."
Azad's comments had come at the National Convention of Parliamentarians on HIV/AIDS Monday. The two-day convention saw the participation of India's National AIDS Control Organisation (NACO) and UNAIDS, among others.
Azad said: "The disease of MSM is unnatural and not good for India. We are not able to identify where it is happening as it is less reported also."
"It is a challenge because in cases of female sex workers we can identify the community and reach out to them. But in case of MSM, it is becoming difficult," he added.
Sidibé, however, spoke out strongly against discrimination of people on the basis of sexual orientation.
"India's successful AIDS response has been possible due to the strong participation of communities of men who have sex with men, sex workers, people who inject drugs and transgender people backed by a strong and progressive National AIDS policy," Sidibe said.
The minister's remarks also attracted flak from the gay community and activists working on the issue.
Mohnish Malhotra, who has long been involved in the fight for gay rights, said: "It's shocking that such a comment was made by the country's health minister."
"Even the UN passed a resolution saying that the LGBT community has equal rights as anyone else and cannot be discriminated on the basis of their sexual orientation," he added.
According to NACO, there are more than 400,000 men who have sex with men in India. HIV prevalence in this population is about 7.3 percent compared to a national adult HIV prevalence of 0.31 percent. India has over 2.5 million HIV positive people.