Background Osteoporosis and obesity are prevalent health conditions that share overlapping risk factors and physiological consequences. After menopause, hormonal changes impact both bone strength and fat distribution. Although fat mass (FM) and lean mass (LM) are important components of body composition, their separate effects on bone mineral density (BMD) are not well understood, especially among Indians. Objective The main objective of this study is to assess how body adiposity, such as FM and LM, is related to BMD in postmenopausal Indian women. Methods A total of 36 postmenopausal women participated in a cross-sectional study at a tertiary care hospital. Participants underwent dual-energy X-ray absorptiometry (DEXA) scans (Hologic Inc., Marlborough, MA, USA) to measure BMD at the spine, hip, wrist, and whole body, along with body composition assessments. Women with secondary causes of osteoporosis, or those on medications affecting bone metabolism, were excluded. Correlations between FM, LM, and BMD were assessed using statistical analysis. Results Among the participants (n = 36), 17 (47.2%) had osteopenia, nine (25.0%) had osteoporosis, and 10 (27.8%) had normal BMD. FM showed significant positive correlations with hip BMD (r = 0.457, p = 0.005), lumbar spine BMD (r = 0.373, p = 0.025), total body BMD (r = 0.349, p = 0.037), and whole-body bone mineral content (WB-BMC) (r = 0.498, p = 0.002). After statistical adjustment, LM correlations were weaker and not statistically significant. Conclusion In Indian postmenopausal women, FM is a stronger predictor of BMD than LM. These findings underscore the importance of considering body fat when assessing and managing osteoporosis risk in this population.