Squat lobster specimens belonging to the family Munididae were recently collected along the southwestern coast of the mainland of India and in the Andaman Islands. The specimens belong to two known species, Agononida prolixa (Alcock, 1894) and Munida compacta Macpherson, 1997, and a new species, Paramunida bineeshi sp. nov. We here redescribe A. prolixa and describe and figure the new species. Munida compacta is newly recorded from India, and we figure the live coloration. In addition, molecular and phylogenetic analyses of two mitochondrial markers (16S rRNA and COI) revealed the phylogenetic relationships of M. compacta and P. bineeshi sp. nov. with their most closely related congeners. The genetic similarity among the individuals of M. compacta from different locations is also addressed.