Bluetongue, an arthropod borne viral disease of wild and domestic ruminants, causes heavy economic losses throughout the world. In the present study, full-length VP7 gene of Indian bluetongue virus (BTV) serotype 23 was sequenced and compared with prototype strains of BTV reported from different countries. Nucleotide sequence analysis of VP7 gene revealed Indian BTV serotype 23 to have 1154 nucleotides with the deletion of two nucleotides at 3' non-coding region and a unique amino acid change 211S-N. The Indian virus also demonstrated a maximum similarity of 94.2% with Australian serotype 1 and a minimum similarity of 67.4% with Australian serotype 15. However, at deduced amino acid level, it had maximum similarity of 99.7% and a minimum of 82.5% with Chinese serotypes 1, 2 and 4 and Australian serotype 15, respectively. Deduced amino acid sequence analysis of putative receptor binding domain (121-249) revealed all the nine hydrophilic domains to be conserved across the serotypes. Functional motifs present in VP7 protein were also conserved in almost all the BTV serotypes including Indian serotype 23. Phylogenetic analysis based on VP7 gene sequence revealed Indian BTV serotype 23 segregating into a monophyletic group along with Australian serotype 1 and Chinese serotypes 1, 2 and 4, indicating its close evolutionary relationship with these Australian and Chinese serotypes.