The outbreak of COVID-19 has caused psychological distress among the Indian population. There are several scales that assess fear and distress related to COVID-19 among individuals. However, these scales are context-specific and lack multi-cultural environment applicability in countries such as India. Therefore, the present study developed a psychometric instrument to assess psychological responses to COVID-19 among the Indian population. A total of 420 participants (60.5% females, Mage=25.89 years) were recruited online using a convenience sampling technique. The 16-item COVID-19 Psychological Distress Scale (CPDS-16) was developed based on the extensive review of the existing scales on psychological constructs related to COVID-19 (yielding four scales with a total of 37 items) and independent review by two external experts. Internal consistency and reliability of the scale was established by using corrected item-total correlations, Cronbach's alpha, and McDonald's omega. Factor structure of the scale was determined by using exploratory factor analysis (EFA). Convergent validity of the scale was established by correlating CPDS-16 scores with the three subscales of the Depression, Anxiety, and Stress Scale (DASS-21). Corrected item-total correlations (range = 0.43 to 0.70), Cronbach's alpha (α = 0.90), and McDonald's omega (ω = 0.89) provided evidence for very good internal consistency and reliability of the scale. EFA of the CPDS-16 demonstrated a two-factor structure identified as 'individual level distress' (10 items) and 'community level distress' (6 items). Convergent validity of the scale was established using the DASS-21 with statistically significant and positive correlations between CPDS-16 and the three DASS-21 subscales (i.e., depression, anxiety, and stress). The CPDS-16 is a reliable and valid instrument in assessing psychological distress caused due to COVID-19 with robust psychometric properties. The scale can be administered rapidly and is useful in screening psychological distress caused due to COVID-19.