The present study investigates the interdecadal modulations of interannual variability in the Indo-western Pacific Ocean Capacitor (IPOC) mode and its influence on the Indian summer monsoon (ISM) rainfall during 1886–2014. The IPOC mode is extracted using singular value decomposition (SVD) analysis of tropical Indian Ocean (TIO) sea surface temperature (SST) and western North Pacific (WNP) 850 hPa relative vorticity anomalies during the boreal summer season (June to August; JJA). Analysis suggests that the IPOC mode induces a southwest-northeast dipole pattern in the Indian subcontinent rainfall with significant positive anomalies over the southern peninsular India and negative anomalies over the eastern parts of the Indo-Gangetic plains during the positive phase of IPOC. The 21-year sliding correlation coefficients between rainfall dipole index and leading principal component of SVD analysis (SVD-PC1) suggest that IPOC and ISM rainfall relationship exhibits significant interdecadal variability during the study period. The entire period has been divided into three distinct epochs as 1895–1926 (epoch-1), 1932–1972 (epoch-2) and 1976–2007 (epoch-3) based on 21-year sliding correlation. It is found that the IPOC mode strongly affect ISM rainfall in epoch-1 and epoch-3, whereas this relationship between the IPOC mode and ISM rainfall is inadequate in epoch-2 pertaining to the absence of the dipole rainfall pattern. The mechanisms responsible for such epochal changes in relationship between IPOC mode and ISM rainfall are discussed. In epoch-1 and epoch-3, anomalous TIO SST and the Pacific–Japan (PJ) pattern/WNP circulation both are well organized as part of the IPOC mode. However, in epoch-2 vigorous warm SSTs over the equatorial central Pacific and cyclonic circulation over the north Pacific accompanied by SST cooling around 40°N are noticed. The north Pacific cyclonic circulation accelerates the southwesterlies emerging from north-western flank of WNP anticyclone. On the other hand, positive SST anomalies and associated low-level convergence in central equatorial Pacific limit the extension of northeasterlies from the southern edge of WNP anticyclone to TIO. As a result, WNP anticyclone is squeezed/twisted between them, thereby weakening and shifting it northeastward. This in turn weakens the PJ mode and the inter-basin interaction of WNP circulation and TIO SSTs, causing disorganized IPOC pattern in epoch-2.