The use of bio-compostable polymers such as Polybutylene Succinate (PBS), Polybutylene Adipate Co-Terephthalate (PBAT) or Polylactic acid is restricted due to the barrier properties especially the water vapor transmission rate (WVTR) which is high in these commercially available polymers. The WVTR plays an important role in preserving the freshness of fruits and vegetables and it has to be optimum. Polymer blending and incorporation of nano fillers are facile routes to formation of internal structure and morphology which gives good control of barrier properties of films. Hence, crystalline structure and morphology of PBS-PBAT blends were studied in detail with respect to composition of the blend. The effect of nanofillers (Halloysite nanotubes/HNT) incorporation as well as addition of polyethylene glycol (PEG) as plasticizer on crystallization process was also investigated. The samples were cast on a glass plate substrate from solution using membrane caster at constant speed and thickness in the range of 100 microns. The composition was varied from 0 to 40 % of PBS in PBAT matrix while addition of HNT was varied from 1 to 5%. Films were air dried in an oven at 50-55 °C for 6 hr. The crystal structure development was studied using wide angle X-ray diffraction (XRD), Differential Scanning Calorimetry (DSC) and the molecular interaction examined using FTIR. XRD data indicated that PBS crystals were in monoclinic α phase but the relative intensities of the 011 and 020 reflections changed drastically in the blends. The DSC analysis revealed that there was preferential growth of PBS α phase crystals with sharp melting at 110 °C. The HNT gave distinct nucleation effect with a shift in the Tc peak as well as increase of ΔHc value. The preferential nucleation by HNT could be associated with the close lattice match for the HNT and the monoclinic phase of PBS. FTIR studies indicate that the all the contents were dispersed well and show hydrogen bonding interaction at the –OH and –COOH groups. These changes in the crystallinity and crystal phase improved the barrier properties leading to the decrease in (WVTR) with the addition of PBS to PBAT as well as incorporation of HNT in the blend. WVTR decreased from 120 g/m2/day to 55 g/m2/day which is excellent for packaging of green agriculture produce.