The region of the Nicobar earthquake swarm of January 2005 has been explored during a recent cruise using multibeam swath bathymetry, seafloor imaging and TV-guided sampling to decipher the seafloor morphology, nature and tectonic frame work. A seamount with well-developed crater at the summit was discovered near to the center of the Nicobar swarm. Rock samples collected by TV-guided grab from the seamount crater are dacite, rhyolite and andesite type with a veneer of ferromanganese oxide coating. The aggregates recovered from the slope consisted of manganese globules. The geochemistry of the globules suggests 66–97% Mn-oxide indicative of hydrothermal origin. The morphology of the seamount, seafloor video footage and geochemistry of the seabed samples suggest that the cratered seamount has erupted in the recent geological past and is dormant at present. This is the first documented report of submarine arc-volcanism in the Andaman Sea. This finding substantiates the prediction of a submarine volcano east of Nicobar Island. Study of the seismicity and the stress pattern in the region suggest that the earthquake swarm in the region occurred due to 2004 Sumatra–Andaman megathrust earthquake. The derived stress pattern suggests that the 2004 earthquake greatly reduced the normal stress in the region of West Andaman fault from the planes or unclamped them. Thus unclamping of the region by the 2004 Sumatra Andaman earthquake led to the initiation of the swarm through predominantly strike slip faulting. The newly discovered dormant submarine volcano indicates the volcanic nature of the region. We suggest that this submarine volcano is a link between sub-aerial volcanoes of Barren–Narcondam Islands of the Andaman Sea and the volcanoes of Sumatra.