Observations at high spatial resolution (100×50 km2) in the western continental shelf of Bay of Bengal during southwest monsoon, when peak discharge occurs into the Bay through major rivers of the Indian subcontinent, revealed that freshwater discharge exerts dominant control on the inorganic carbon components in surface waters. Lower than present atmospheric pCO2 levels were found in the northwestern (NW) than southwestern (SW) coastal Bay of Bengal. The pCO2 levels in the peninsular rivers were an order of magnitude higher (5000–17000 µatm) than that of atmospheric levels and glacial river Ganges (∼500 µatm). The discharge from the peninsular rivers has a stronger influence in the SW region, whereas the Ganges river discharge has a stronger influences in the NW region. Source or sink of CO2 in the shelf region depends on the discharged river characteristics and the East India Coastal Current that distributes discharged water along the coast. Although during northeast monsoon, the situation is briefly reversed and the region acts as a sink, and on annual scale, the western Bay of Bengal acts as a source for atmospheric CO2 than hitherto hypothesised.