A lack of consumption of a diversified diet is associated with poor physical and cognitive development in children. Evidence on the relationship between minimum dietary diversity (MDD) and childhood malnutrition remains inconclusive in India. We hypothesized that children aged 6 to 23 months on a diversified diet (five out of eight defined foods and beverages) are less likely to be malnourished (stunting, wasting, and underweight) compared to their counterparts who are not on a diversified diet. This cross-sectional study was based on the 2019-2021 National Family Health Survey of India, comprising a weighted sample of 57,714 children aged 6 to 23 months. Multilevel logistic regression was conducted for data analysis. The results showed a significant protective effect of dietary diversity on underweight (odds ratios [OR] = 0.91; 95% confidence intervals [CI]: 0.86-0.96). In addition, children who did not consume eggs (OR = 1.09; 95% CI; 1.03-1.15), dairy products (OR = 1.22; 95% CI: 1.17-1.27), or fruits and vegetables (OR = 1.11; 95% CI: 1.06-1.17) were more likely to be underweight than children who did. Children who did not consume dairy products, fruits, and vegetables were also more likely to be stunted and wasted. However, we did not find significant associations of MDD with wasting and stunting. Nutritional interventions promoting daily consumption of dairy products, eggs, fruit, and vegetables are recommended to address the growing problem of childhood malnutrition in India. Regions with higher rates of malnutrition and those lacking MDD, such as Uttar Pradesh and Rajasthan, should be prioritized.