In response to the Indian Monsoon freshwater forcing, the Bay of Bengal exhibits a very strong seasonal cycle in sea surface salinity (SSS), especially near the mouths of the Ganges-Brahmaputra and along the east coast of India. In this paper, we use an eddy-permitting (∼25 km resolution) regional ocean general circulation model simulation to quantify the processes responsible for this SSS seasonal cycle. Despite the absence of relaxation toward observations, the model reproduces the main features of the observed SSS seasonal cycle, with freshest water in the northeastern Bay, particularly during and after the monsoon. The model also displays an intense and shallow freshening signal in a narrow (∼100 km wide) strip that hugs the east coast of India, from September to January, in good agreement with high-resolution measurements along two ships of opportunity lines. The mixed layer salt budget confirms that the strong freshening in the northern Bay during the monsoon results from the Ganges-Brahmaputra river discharge and from precipitation over the ocean. From September onward, the East India Coastal Current transports this freshwater southward along the east coast of India, reaching the southern tip of India in November. The surface freshening results in an enhanced vertical salinity gradient that increases salinity of the surface layer by vertical processes. Our results reveal that the erosion of the freshwater tongue along the east coast of India is not driven by northward horizontal advection, but by vertical processes that eventually overcome the freshening by southward advection and restore SSS to its premonsoon values. The salinity-stratified barrier layer hence only acts as a “barrier” for vertical heat fluxes, but is associated with intense vertical salt fluxes in the Bay of Bengal.