India's mobile subscribers totalled 563.73 million at the last count, enough to serve nearly half of the country's 1.2 billion population.
But just 366 million people - around a third of the population - had access to proper sanitation in 2008, said the study published by the United Nations University, a UN think-tank.
"It is a tragic irony to think in India, a country now wealthy enough that roughly half of the people own phones," so many people "cannot afford the basic necessity and dignity of a toilet," said Zafar Adeel, the UN University director.
Mr Adeel heads the UN University's Institute for Water, Environment and Health, based in the Canadian city of Hamilton, which prepared the report.
Worldwide, an estimated $358 billion (£230 billion) is needed between now and 2015 to achieve the UN Millennium Development Goal (MDG) of halving the proportion of people with inadequate sanitation from 2000 levels.
Proper sanitation "could do more to save lives, especially those of young people, improve health and help pull India and other countries in similar circumstances out of poverty than any alternative investment," Mr Adeel said.
Poor sanitation is a major contributor to water-borne diseases, which in the past three years alone killed an estimated 4.5 million children under the age of five worldwide, according to the study.
The report gave a rough cost of $300 to build a toilet, including labour, materials and advice.
The world could expect a return of up to $34 for every dollar spent on sanitation through improved productivity and reduced poverty and health costs, said Adeel.
He said improving sanitation was "an economic and humanitarian opportunity of historic proportions."
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