Abstract Background The incidence of preterm birth and subsequent low birth weight (LBW) are vital global public health issues. It contributes to high infant and child mortality in the early stages of life and later on in adult life; it increases the risk for non-communicable diseases. The study aims to understand the socio-economic status-related inequality for LBW among children in India. It hypothesises that there is no association between the socio-economic status of the household and the newborn’s LBW in India. Methods The study utilised data from the fourth round of the National Family Health Survey, a national representative cross-sectional survey conducted in 2015-16 (N = 127,141). The concentration index (CCI) and the concentration curve (CC) measured socio-economic inequality in low birth status among newborns. Wagstaff decomposition further analysed key contributors in CCI by segregating significant covariates. Results About 18.2% of children had low birth weight status. The value of concentration was − 0.05 representing that low birth weight status is concentrated among children from lower socio-economic status. Further, the wealth quintile explained 76.6% of the SES related inequality followed by regions of India (− 44%) and the educational status of mothers (43.4%) for LBW among children in India. Additionally, the body mass index of the women (28.4%), ante-natal care (20.8%) and residential status (− 15.7%) explained SES related inequality for LBW among children in India. Conclusion Adequate attention should be given to the mother’s nutritional status. Awareness of education and usage of health services during pregnancy should be promoted. Further, there is a need to improve the coverage and awareness of the ante-natal care (ANC) program. In such cases, the role of the health workers is of utmost importance. Programs on maternal health services can be merged with maternal nutrition to bring about an overall decline in the LBW of children in India.