S. prashadi is a migratory, demersal cuttlefish living in shallow waters at depths of approximately 40 to 50 metres.

It is found in many locations including the east coast of Africa, around India, in the Red Sea, and Persian Gulf.

In more southern Indian waters such as those of Chennai, it occurs in greater numbers between January and April.

[4] Hooded cuttlefish may act more curious and confident around divers compared to the behavior of squid or octopus.

[1] It is also caught unintentionally as bycatch in comparatively small amounts off the northeast coast of India, which is not reflected independently in catch statistics.

[1] In 2005 in the Gulf of Suez, stock assessment studies identified Sepia prashadi as an "under-exploited resource".

This "is potentially a threat to all cuttlefish", which respond by having a "denser cuttlebone" likely to negatively affect buoyancy regulation.