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The middle Eocene Fulra Limestone Formation of the Kachchh Basin, western India was investigated to interpret depositional environments and sources of limestones based on facies analysis, mineralogy, and major, trace, and rare earth elements (REEs) geochemistry. Facies stacking pattern of the Fulra Limestone Formation exhibits an overall shallowing‐upward sedimentary succession developed in the middle to inner ramp to lagoonal set‐up. Staining of the thin sections and X‐ray diffraction patterns show dominance of calcite mineral. The CaO, ranging from 40.45% to 49.69%, is the dominant oxide among the major oxides followed by SiO2 (4.04–10.3%). The dominance of CaO over MgO suggests that the major mineral phase has been calcite and no dolomitization occurred during the deposition of the Fulra limestone. The low proportion of SiO2 and Al2O3 suggests low siliciclastic input during the precipitation of the Fulra limestone that is confirmed by the positive correlation of ∑REE with Al2O3, Fe2O3, Ni, Th, Sc, and Y and the negative correlation of SiO2, Al2O3, and Sr with CaO. The average value of REE contents in the Fulra Limestone Formation are lower (*16.02 ppm) than the average value of typical marine carbonates (*28 ppm). The Post‐Archean Australian Shale‐normalized REE + Y patterns of the Fulra limestone exhibit seawater like shale‐normalized REE + Y pattern, whereas slightly lower average value of Y/Ho ratio (34.60) than the typical seawater value (~44–74) suggests modification of the seawater, to some extent, by input of freshwater in a coastal environment. The REEs of the Fulra Limestone Formation have similarity with the carbonates of the Arabian Sea and/or shallow marine carbonates with exception of a few elements. It is envisaged from this study that the Fulra limestone was deposited in a shallow marine to coastal set‐up where mixing of the continental material in seawater was feasible. [ABSTRACT FROM AUTHOR]