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The present study was intended to develop a Water Quality Index (WQI) for the coastal water of Visakhapatnam, India from multiple measured water quality parameters using different multivariate statistical techniques. Cluster analysis was used to classify the data set into three major groups based on similar water quality characteristics. Discriminant analysis was used to generate a discriminant function for developing a WQI. Discriminant analysis gave the best result for analyzing the seasonal variation of water quality. It helped in data reduction and found the most discriminant parameters responsible for seasonal variation of water quality. Coastal water was classified into good, average, and poor quality considering WQI and the nutrient load. The predictive capacity of WQI was proved with random samples taken from coastal areas. High concentration of ammonia in surface water during winter was attributed to nitrogen fixation by the phytoplankton bloom which resulted due to East India Coastal Current. This study brings out the fact that water quality in the coastal region not only depends on the discharge from different pollution sources but also on the presence of different current patterns. It also illustrates the usefulness of WQI for analyzing the complex nutrient data for assessing the coastal water and identifying different pollution sources, considering reasons for seasonal variation of water quality.