The interannual variation of Indian Ocean subtropical mode water (IOSTMW) subduction rate in the Southwest Indian Ocean from 1980 to 2007 is investigated in this paper based on Simple Ocean Data Assimilation (SODA) outputs. Climatology of subduction rate exceeds 75 m/year in the IOSTMW formation area. The renewal time of permanent pycnocline water mass based on the subduction rate is calculated for each density class: 3–6 years for IOSTMW (25.8 < σ θ < 26.2 kg m−3). Subduction rate in the Southwest Indian Ocean subtropical gyre exhibits a great year-to-year variability. This interannual variations of the IOSTMW subduction rate is primarily dominated by the lateral induction term, associated with the interannual variations of strong meridional gradient of winter mixed layer depth (MLD). The slope of the mixed layer depth in the mode water is closely linked to the large variations of deep late winter MLD in the mid-latitudes and negligible variations of shallow winter MLD in lower latitudes. It is further identified that the interannual variation of late winter MLD in this area is largely controlled by the latent and sensible heat flux components. The water volume of the permanent pycnocline in the IOSTMW distribution area is also found to show a significant interannual variability, and it is well correlated with the interannual variation of subduction rate.