Abstract More than a hundred thousand dengue cases are diagnosed in India annually, and about half of the country’s population carries dengue virus-specific antibodies. Dengue propagates and adapts to the selection pressures imposed by a multitude of factors that can lead to the emergence of new variants. Yet, there has been no systematic analysis of the evolution of the dengue virus in the country. Here, we present a comprehensive analysis of all DENV gene sequences collected between 1956 and 2018 from India. We examine the spatio-temporal dynamics of India-specific genotypes, their evolutionary relationship with global and local dengue virus strains, interserotype dynamics and their divergence from the vaccine strains. Our analysis highlights the co-circulation of all DENV serotypes in India with cyclical outbreaks every 3-4 years. Since 2000, genotype III of DENV1, cosmopolitan genotype of DENV2, genotype III of DENV3 and genotype I of DENV4 have been dominating across the country. Substitution rates are comparable across the serotypes, suggesting a lack of serotype-specific evolutionary divergence. Yet, the envelope (E) protein displays strong signatures of evolution under immune selection. Apart from drifting away from its ancestors and other contemporary serotypes in general, we find evidence for recurring interserotype drift towards each other, suggesting selection via cross-reactive antibody-dependent enhancement. We identify the emergence of the highly divergent DENV4-Id lineage in South India, which has acquired half of all E gene mutations in the antigenic sites. Moreover, the DENV4-Id is drifting towards DENV1 and DENV3 clades, suggesting the role of cross-reactive antibodies in its evolution. Due to the regional restriction of the Indian genotypes and immunity-driven virus evolution in the country, ∼50% of all E gene differences with the current vaccines are focused on the antigenic sites. Our study shows how high incidence and pre-existing population immunity are shaping dengue virus evolution in India. Author summary Dengue is a mosquito-borne disease with four closely related serotypes of the virus (DENV1-4). Further, cross-reacting dengue antibodies from a previous infecting dengue serotype can protect or enhance infection from other serotypes. This can force the emergence of new dengue variants that find ways to escape the immune action or take advantage of it. In endemic countries like India, high rates of previous dengue infection can drive the evolution of dengue serotypes in complex ways. We compare all published dengue virus sequences to understand how new variants of dengue are emerging in India. Dengue cases and corresponding viruses display triennial surges. Further, the dengue envelope protein for each serotype shows recurring divergence and reversal towards its ancestral strain over a three-year window. Such fluctuations are also correlated among the dengue serotypes in India and could arise from the changing levels of cross-reactive antibodies. This, combined with the regional exchange of the virus among Asia-Pacific countries, has led to the emergence of India-specific DENV lineages, including a new DENV4 (Id) variant. This has also contributed to significant variations in the epitope regions of the current dengue viruses in India compared to the vaccines with implications for their efficacy.