Runtime.ImportModuleError after uploading my NodeJS project as a zip in AWS Lambda

Hope everyone is doing well. When I am trying to deploy my NodeJS (Runtime: 18.0.x) project on AWS Lambda, I am getting the following error:

{
  "errorType": "Runtime.ImportModuleError",
  "errorMessage": "Error: Cannot find module 'index'\nRequire stack:\n- /var/runtime/index.mjs",
  "trace": [
    "Runtime.ImportModuleError: Error: Cannot find module 'index'",
    "Require stack:",
    "- /var/runtime/index.mjs",
    "    at _loadUserApp (file:///var/runtime/index.mjs:997:17)",
    "    at async UserFunction.js.module.exports.load (file:///var/runtime/index.mjs:1032:21)",
    "    at async start (file:///var/runtime/index.mjs:1195:23)",
    "    at async file:///var/runtime/index.mjs:1201:1"
  ]
}

My folder structure is as follows: My package.json is as follows:

{
  "name": "gpt-simulation-backend",
  "version": "1.0.0",
  "description": "",
  "main": "index.js",
  "type": "module",
  "scripts": {
    "start": "nodemon index.js",
    "start:prod": "NODE_ENV=production nodemon index.js",
    "test": "echo \"Error: no test specified\" && exit 1",
    "lint": "eslint . --ext .js --fix"
  },
  "author": "Srijan Srivastava at Careerhacker",
  "license": "ISC",
  "devDependencies": {
    "eslint": "^8.41.0",
    "eslint-config-airbnb": "^19.0.4",
    "eslint-config-prettier": "^8.8.0",
    "eslint-plugin-import": "^2.27.5",
    "eslint-plugin-jsx-a11y": "^6.7.1",
    "eslint-plugin-node": "^11.1.0",
    "eslint-plugin-prettier": "^4.2.1",
    "nodemon": "^2.0.22",
    "prettier": "^2.8.8"
  },
  "dependencies": {
    "amazon-cognito-identity-js": "^6.3.1",
    "dotenv": "^16.1.3",
    "express": "^4.18.2",
    "express-jsdoc-swagger": "^1.8.0",
    "mongoose": "^7.2.2",
    "morgan": "^1.10.0",
    "node-fetch": "^3.3.1"
  }
}

My index.js is:

import { config } from 'dotenv';
import { connect } from 'mongoose';

import app from './app.js';

config({ path: './.env' });

const dbUri = process.env.MONGODB_URI;

connect(dbUri, {
  useNewUrlParser: true,
  useUnifiedTopology: true,
}).then(() => {
  console.log('Connected to MongoDB!!');
});

const port = process.env.PORT || 3000;
app.listen(port, () => {
  console.log(`App running on port ${port}...`);
});

I have tried a lot of things mentioned on stack-overflow and forums to fix the issue. However, the error still persists. The name of the zip is same as that of the name defined in the package.json. Any kind of help is appreciated. I understand that the problem might be answered somewhere, but I have not found a solution which works. If anyone can forward me to a correct resource, I will be glad.

Edit1: I am also selecting files and not the entire folder.

Edit2: Directory structure on AWS (after removing the node_modules) -->