AbstractInterannual climate modes, especially the southern annular mode (SAM), significantly influence the wave climate modulation of the Indian Ocean (IO). The present study, aligned with previous research, identifies two crucial swell generation regions in the IO: the extratropical southern Indian Ocean (ETSI) and the tropical southern Indian Ocean (TSIO). The SAM, governing Southern Ocean surface winds, significantly shapes wave generation in these zones, thereby dominantly regulating IO wave conditions. Positive SAM phases shifts the westerlies poleward creating significant negative anomalies in the northern ETSI, reducing wave generation and swell propagation into the northern IO (NIO) basins, while the positive wind anomalies in the western TSIO creates a new swell generation area that directs swells towards the Arabian Sea, elevating wave heights there during monsoons. Conversely, negative SAM phases enhance TSIO easterlies, making it the primary IO swell source, increasing swell activity in the Bay of Bengal, notably during premonsoon and monsoon seasons. SAM impact expands beyond swells, influencing NIO wave climate by altering wind seas through Hadley cell (HC) circulation shifts. Positive SAM phases trigger NIO and midlatitude anomalous warming, intensifying HC and NIO surface winds in the next season, thereby affecting convection and subsequent sea surface temperature (SST) anomaly changes. The “SAM positive anomaly wind‐SST oscillations (SPAWSO)” pattern emerges, where warm SST anomalies in DJF and JJA precede increased surface winds in MAM and SON, thus increasing the wind‐sea conditions in the NIO. SPAWSO, hence, acts as a delayed mode, season‐dependent positive air–sea interaction cycle linked to positive SAM phases, significantly impacting NIO's wind‐sea dynamics. Thus the present study provides better insights into the long‐term wave prediction accuracy in the IO by considering the direct swell influence and SPAWSO‐driven wind‐sea changes, aiding preparations for changing wave dynamics and their impacts.