In this study, the wind and the surface waves in the Indian Ocean (IO) during 1979–2017 are studied based on the ECMWF ERA5 Reanalysis data. Long‐term statistical analysis of extreme waves is carried out based on Generalized Extreme Value distribution using annual maxima and the spatial distribution of return levels for 50 and 100 years are studied. In general, the ERA5 significant wave height (Hs) and maximum wave height (Hmax) show a good agreement with measured buoy data in the coastal (bias ~0.29 m) and deep waters (bias ~0.18 m). During the tropical cyclone, underestimation of Hs and Hmax in the ERA5 data compared to buoy data is 2.7 and 1.4%, but in general the bias is large (~0.69 m). Swell domination is observed in larger regions of the IO, whereas wind‐seas are comparable to swells in the Southern Ocean. The meridional wind speed largely influences the spatial pattern of Hs in the North IO. The stronger winds over the Southern Ocean play a major role in generating higher waves at higher latitudes. Maximum value of the 100‐year return level for Hs in IO is 17.8 m, whereas highest value of the Hs is 16.7 m and Hmax is 32.0 m. Severe wave events are common at 50°–60°S and only during 25% of the time in a year, Hmax is less than 5 m in this region. Ratio of the Hmax to Hs varies from 1.46 to 2.3 with a mean value of 1.87. The 100‐year return value of Hs changed by −4 to 5 m, when the length of the dataset is decreased from 39 years (1979–2017) to recent 20 years. On an average, from 1979 to 2017, the annual average Hmax increased by 0.73 cm/year. In major areas of the IO, a clear decrease of the Hs is observed during 1991–2017, whereas during 1979–2017, an increase in Hs is found.