The hydrostatic pressure induced band diagram of an InGaAsN/GaAs spherical quantum dot (QD) system is theoretically calculated using an expanded form of standard 8 band k · p Hamiltonian. The band parameters including energy gap, band offsets, and effective masses of electron and hole as a function of hydrostatic pressure are extracted using 10 band k · p model to calculate optical gain, threshold current density, and confined exciton binding energies of the QD system for the possible potential applications in 1.3–1.55 μm laser diodes. The optical gain increases with the increase in hydrostatic pressure up to 30 kbar and eventually decreases for further application of higher pressures. This effect is not usually observed in InGaAsN/GaAs quantum wells owing to the strong dependence of hole and electron effective masses with the hydrostatic pressure. A relative blue shift is observed in the gain spectra due to the increase in hydrostatic pressure or carrier concentration whereas a redshift is observed due to the increase in geometrical dimensions or impurity concentration which helps in estimating the range of operation of InGaAsN/GaAs QD based devices. The obtained binding energies, threshold current densities, and strain within the QDs help in understanding the influence of pressure and dot radius on these parameters.