In view of the immense use of LiNbO3 (LN) in the Photonic industry, a need arises to develop a theory to study the variation of Refractive Indices near the surface of LN device. The “Local” fields as experienced by ions on or near the surface of a dielectric medium ought to be different from those in the interior, thus one expects a Refractive Index variation near the surface of the material. In the studies involving thin films and optical waveguides, this variation could possibly alter the propagation characteristics. The variation of ordinary and extraordinary refractive indices (no, ne) from the surface to the interior of depth 69.315A° near the surface for X-cut and Z-cut LN waveguides are evaluated using theoretical Point Dipole Approximation (PDA) method. For an X-cut waveguide, no is found to decrease from 2.9696 on the surface to 2.2864 in the interior whereas, ne is found to increase from 1.4849 to 2.2024. The birefringence (dn=ne–no) is negative and observed to be increase from -1.4847 to -0.0840. For a Z-cut waveguide, no is found to increase from 1.8046 to 2.2864 whereas ne is found to decrease from 2.7005 to 2.2024. Here the birefringence is positive, decreasing from 0.8958 to zero to a depth of 60.5A° and further decreasing to -0.0840 to a depth of 69.315A°. It is observed that the variation of refractive indices no , ne and dn variation with depth near the surface for both the cases are quite opposite in nature. This is primarily due to the dipole orientation and their relative distributions in the lattice being different for the two directions of the electric vectors of light as is evident from the values.