Most of the cultivated indica rice genotypes are less amenable to genetic modifications due to their poor callus induction and regeneration potential. The prerequisite for genetic enhancement of indica rice genotypes by biotechnological approach is to develop an efficient protocol for callus induction and plant regeneration. In the present study, we established an optimized regeneration protocol for rice genotype AC39020, which is moderately drought tolerant with high root growth and biomass. To use this genotype in the crop improvement program the prerequisite is callus induction and regeneration protocol in this indica rice genotype. The mature seeds of AC39020 used as explants for callus induction on LS, MS and N6 media with different hormones and amino acid concentrations. LS basal media with 2.5 mgL-1, 2, 4-D and 500 mgL-1 glutamine showed 91.3% callus induction frequency. Subsequently the embryogenic callus was cultured on MS media supplemented with BAP, Kinetin, NAA, and TDZ. The MS medium supplementedwith 4mg L-1 BAP and 0.5 mgL-1 NAA showed 75% regeneration efficiency. Since regeneration in indica rice varieties is tedious, far-reaching, highly genotype-specific, we exposed the embryogenic calli for mild desiccation stress for 24 h and 48 h. The desiccation treatment for 48h increased shoot regeneration frequency from 16.7 % to 40.2 % compared to non-desiccated calli. The protocol developed was highly reproducible and this protocol can also be used for further improvement of this rice genotype through genetic modification.