In this paper, a novel index modulation (IM) for orbital angular momentum (OAM) communication is proposed by employing the phase offset (PO) state to enhance the capacity, called OAM-PO-IM. The uniform circular array (UCA) based OAM is exploited with PO. The UCA is divided into uniform circular sub-arrays (UCSAs) in the transmitter allocating additional index bits for the activation state of UCSA. In addition, the modified Bessel function of the first kind is used to derive the channel model for effective OAM mode combination under beam divergence. Simulation results are provided to compare with conventional schemes in terms of capacity and bit error rate (BER).