The Eastern Arabian Sea Shelf i.e. Western Indian Continental Shelf (WICS) – a known biogeochemical hotspot is characterized by monsoonal upwelling, seasonal O2 deficiency, extremely high N2O build-up and sulphidic events. The frequency and duration of the sulphidic events have increased over the last two decades, but their impact on the pelagic N cycling, N budget, and N2O dynamics is poorly constrained. Thus, to address these problems and assess their implications on WICS biogeochemistry, we carried out physico-chemical measurements, 15N-labeled incubations and bag incubations on five transects over the shelf during the sulphidic event (September-October) of 2011. We observed very high rates of sulphide-driven chemolithotrophic denitrification (1885–5825 nM N2 d−1) in the sulphidic, nitrate-depleted waters, and its potential occurrence in the sulphide-free, nitrate-replete waters (460–3137 nM N2 d−1), along with high transient N2O production, and comparably low rates of anammox (0–119 nM N2 d−1) and DNRA (0–45 nM N d−1). Despite the predominant cloud cover during the monsoon season, we could for the first time show the satellite image of a large colloidal sulphur (S0) plume associated with the sulphidic event off Western India providing further evidence of extensive sulphide oxidation coupled to denitrification. Sulphide-driven denitrification (mean rate = 2697 nM N2 d−1) appeared to be the dominant N loss process during the anoxic regime (September-October) replacing the chemoorganotrophic (i.e. heterotrophic) denitrification (342 nM N2 d−1) that predominates during the preceding suboxic regime (July-August). Overall, the highest sulphide-driven denitrification rate over the WICS was found to be the second highest among the anoxic coastal systems of the world. Furthermore, simultaneous consumption of NOx− and S2− at a ratio close to the theoretical value in the anaerobic incubations of chemocline waters indicated that the sulphide-driven denitrifiers were fixing carbon. The estimated dark C production (0.21 g C m−2 d−1) due to chemolithoautotrophic denitrification was 18% of the photoautotrophic production and accounted for 15% of the total column productivity. Based on our conservative estimates, the chemolithoautotrophic denitrification was responsible for the removal of 0.4 Tg of fixed N and 0.57 Tg of sulphide, and fixation of 0.1 Tg of carbon annually in the shelf waters. Thus, the sulphidic event impacted the biogeochemistry and ecology, and modulated the N loss pathways and rates over the WICS. With the expansion and intensification of OMZs induced by global climate change, and the spreading of dead zones due to increasing anthropogenic activities, chemolithoautotrophic denitrification is likely to become increasingly significant in oceanic N cycle and impact the N budgets of shallow marine systems particularly.