Reliable positioning, timing, and navigation services have become vitally important in safety and security applications. Hence, the need for Global Navigation Satellite Systems (GNSS) is growing continually. However, Continuous Wave Interference (CWI) was found to be one of the major potential threats of GNSS systems which degrades the receiver's performance. So, in this paper, a new approach using Improved Variational Mode Decomposition and Wavelet Packet Decomposition (IVMD‐WPD) has been proposed to mitigate CWI in NAVigation with Indian Constellation (NavIC) receivers. Although VMD is considered as an excellent signal analysis tool in decomposing non‐stationary and complex signals, the accuracy of the decomposition results depends upon the parameter setting. To address this, firstly, Normalized Kurtosis Energy Ratio (nKER) evaluation index is constructed. Then, the principle of nKER maximum is implemented to find the optimal parameters of VMD. Using the optimized parameters, the received signal is decomposed by IVMD into sub‐signals. Secondly, the mutual information index is introduced to extract the information dominant modes. The extracted modes are then processed by wavelet packet filter and finally, the desired signal is reconstructed. The proposed IVMD‐WPD method not only reduces the jamming efficiently but also overcomes the limitations of VMD. Moreover, by integrating IVMD with wavelet packet filter, the remaining effects of jamming and noise present in desired modes can be filtered thereby enhancing the performance. Simulation results reveal that the proposed method performs better in comparison with the conventional techniques in case of a single tone, multi‐tone, and chirp jamming environments.