Indium phosphide (InP) is an excellent material used in space electronic devices due to its direct band gap, high electron mobility, and high radiation resistance. Displacement damage in InP, such as vacancies, interstitials, and clusters, induced by cosmic particles can lead to the serious degradation of InP devices. In this work, the analytical bond order potential of InP is modified with the short-range repulsive potential, and the hybrid potential is verified for its reliability to simulate the atomic cascade collisions. By using molecular dynamics simulations with the modified potential, the primary damage defects evolution of InP caused by 1–10 keV primary knock-on atoms (PKAs) are studied. The effects of electronic energy loss are also considered in our research. The results show that the addition of electronic stopping loss reduces the number of point defects and weakens the damage regions. The reduction rates of point defects caused by electronic energy loss at the stable state are 32.2% and 27.4% for 10 keV In-PKA and P-PKA, respectively. In addition, the effects of electronic energy loss can lead to an extreme decline in the number of medium clusters, cause large clusters to vanish, and make the small clusters dominant damage products in InP. These findings are helpful to explain the radiation-induced damage mechanism of InP and expand the application of InP devices.