In the last decade, the usage of underwater vector sensor has gained a lot of importance in the detection of low frequency underwater acoustic signals, as the noise level radiated by the submarine has been drastically reduced. Acoustic sensor based on Micro Electro Mechanical Systems (MEMS) technology is the recent advancement in the area of underwater acoustic vector sensors. We are reporting the design, fabrication, preliminary characterization and evaluation of the dynamics of a two-dimensional underwater acoustic vector sensor by simulation and experimental study. The vector sensor is realized using Reduced Graphene Oxide (rGO) as sensing element and Kapton as flexible substrate, to yield better sensitivity compared to the conventional acoustic vector sensor. Design of vector sensor is inspired by the biological sensing system of fish. The application of piezoresistive transduction principle and MEMS technology helps in miniaturisation and low frequency acoustic signal detection. The fabrication process is made simple, scalable and cost minimum by using the method of drop casting for the deposition of rGO on flexible substrate kapton, thereby eliminating the requirement of clean room. COMSOL Multiphysics 5.5 version is used to simulate acoustic vector sensors using polysilicon and rGO on substrates, silicon and flexible kapton respectively. The simulation results indicate that the sensitivity of rGO based acoustic vector sensor is −149.47 dB which is better in comparison with the sensitivity of −173.37 dB of conventional polysilicon vector sensor. By simulation, the natural frequency of the sensor is found to be 46.62 Hz, which closely matches with the theoretical value 41.06 Hz of the device as per the design criteria and hence, it could detect the low frequency acoustic signals. The displacement sensitivity of the fabricated sensor is found to be 0.0264 V/mm and 0.0276 V/mm for applied displacements in axial and radial directions respectively. The device is tested for its performance parameters i.e., sensitivity and directivity, by performing an acoustic test in the presence of an elastic medium, water. This test results infer that, the device is able to detect and give smooth output response for the acoustic signals in the low frequency range. The Y and X-channel receiving sensitivity exhibited by the sensor is found to be −128.04 dB to −134.93 dB and −130.61 dB to −136.78 dB respectively. Directivity pattern of the sensor is found to be in the shape of 8 with symmetry. As the device is a vector sensor, in addition to the scalar pressure measurement, it should be able to provide additional incentives such as acoustic particle displacement and acoustic particle velocity at any point in the acoustic field. In this paper, an experimental setup is made to generate deep and intermediate water waves, thereby attempting to simulate ocean conditions in the laboratory. Subsequently the numerical evaluation of the wave kinematics, i.e., fluid particle displacement and fluid particle velocity are performed by applying Airy's theory. An effort is also made to analyse the wave kinematics for various water depths, varying from Surface Water Level (SWL) till the sea bed. In this study, wave kinematics are analysed numerically by using experimental data and also by modelling Fluid-Structure Interactions in COMSOL Multiphysics environment. Our results show that the fluid flow of velocity 0.31 m/s results in fluid particle velocity of 0.125 m/s at time 0.215 s (around f = 5 Hz) by both the methods and fluid particle displacement is found to be 19.66 μm. The experimental test setup and videos are made publicly available1: 1https://sites.google.com/view/smithapaib/downloads