Freshwater fluxes from precipitation and river runoff play a critical role in modulating upper-ocean stratification, nutrient availability, and biogeochemical processes in the coastal waters of the Indian subcontinent. The formation of the barrier layer thickness (BLT) links freshwater input to vertical mixing, influencing both productivity and carbonate chemistry. High-resolution (5 km) MITgcm-BLINGv2 simulations are conducted for the Arabian Sea (AS) and the Bay of Bengal (BoB), and sensitivity experiments are performed to represent reduced and increased freshwater perturbations. We analyzed seasonal variability of buoyancy frequency (N²), mixed layer depth (MLD), net primary productivity (NPP), pH, and phytoplankton biomass across five coastal regions. Reduced freshwater scenarios weakened or eliminated BLT, leading to deeper MLD and N²maxima, with subsurface nutrient-rich waters entrained upward. This enhanced nutrient availability increased NPP in the coastal regions. However, the upward transport of subsurface carbon also lowered surface pH by 0.03, indicating a trade-off between biological enhancement and increased surface acidification. In the increased freshwater scenario, the BLT strengthened, the MLD shoaled, and NPP decreased, while surface pH increased due to reduced vertical carbon exchange. Interestingly, stratification deepening under reduced freshwater input is more pronounced in the southeastern AS than in the BoB, contrasting conventional understanding. Vertical phytoplankton responses are consistent with these trends, with small and large phytoplankton biomass increasing under weaker BLT and decreasing under enhanced BLT. Freshwater-driven BLT modulation drives a complex interplay between carbon uptake and export along Indian coastal waters. These findings emphasize the importance of accurately representing freshwater fluxes in biogeochemical models to capture regional ecosystem responses.