Indian Knowledge Systems (IKS) are systems that have deep and long held traditions of Indian philosophical, cultural, and scientific tradition, and they offer a holistic method, to unite ethical values, sustainability and social welfare with economic activity, and thus have become highly applicable in the the modern economic environment. This paper is critical by exploring how the Indian Knowledge Systems can help solve the current economic problems that include environmental degradation, socio-economic inequality, and unsustainable growth patterns. The researcher employs a qualitative and analytical approach in the form of second hand data gathered via academic literature, policy reports and institutional reports. To determine the relevance and applicability of IKS principles in the current economic structures, content analysis and comparative analysis will be used. The paper will evaluate the role of IKS in sustainable and inclusive development, explore its role in innovation and entrepreneurship, and outline the most significant issues concerning commercialization, institutional integration, and protection of intellectual property. The results show that Indian Knowledge Systems can play a valuable role in ethical governance, community-based entrepreneurship, resource-efficient activity, and inclusive development of industries (agriculture, healthcare, education, and MSMEs). Nevertheless, structural and policy-based implications still restrict their massive incorporation into the mainstream economy. The research finds that, through specific policy backing, institutional coordination, and learning reforms, Indian Knowledge Systems can be used to supplement the modern day economic models and lead to sustainable and equitable development in the long run.