Noble metal nanoparticles incorporated in hybrid nanocomposites are considered as promising candidates for electrochemical applications owing to their physicochemical properties. In this work, we demonstrated the preparation of Fe2O3/rGO nanocomposite by hydrothermal method, followed by in situ Ag binding synthesis for the fabrication of hybrid nanocomposite (Ag/α-Fe2O3/rGO). The crystallographic structure of the hybrid nanocomposite is examined by X-ray diffraction (XRD) analysis which confirms the characteristics of Ag, Fe2O3, and rGO. The microscopic studies and energy-dispersive X-ray analysis (EDS) spectra confirmed the presence and formation of hybrid nanostructures. Raman analysis results further corroborate the formation of composite with significant D and G bands in Fe2O3/rGO and Ag/α-Fe2O3/rGO samples, which follow XRD results. Cyclic voltammetry (CV) and galvanostatic charge-discharge (GCD) studies were carried out to analyze the faradaic capacitor behavior. A specific capacitance of 209.09 F/g was observed by GCD studies for Ag/α-Fe2O3/rGO composites at a current density of 1 A/g, which exhibited good capacitance retention of 94% for 5000 cycles at 7 A/g. Furthermore, the Ag/α-Fe2O3/rGO electrode was used for the electrochemical detection of nitrate ions in soil by utilizing an ion-selective membrane over the surface of the Ag/α-Fe2O3/rGO electrode. The fabricated nanocomposite electrode showed a significant change in the peak current values with the concentration of nitrate in a linear range from 10 to 450μM with the sensitivity to be calculated 1.426 μA μM-1cm-2 and limit of detection (LOD) calculated to be 0.18μM. The reproducibility and interference studies showed a promising result to be utilized for detecting nitrate ions in soil and in real-time applications.