At present petrochemical based plastic materials are being widely used in the packaging industries, however, due to their non-biodegradability their disposal has become a concerned issue for the environmentalists. This has shifted the concern of the researchers to manifest biodegradable, non-toxic bio plastic but either the existing biocomposite films lack antioxidant properties which makes them inefficient in food packaging or the cost of making is quite high leading to their incapability into marketing. Further, much work is not established on the extraction and characterization of cellulose from rice straw and later using it as fillers in the Starch/Polyvinyl alcohol (St/PVA) films. To target this the present study shows the potential of St/PVA films synthesized via solvent casting method, induced with cellulose fibers (CF) which are extracted from agricultural waste rice straw and polymer PEG (Polyethylene glycol) possessing antioxidant properties. The dispersion of the cellulose fillers and polymer PEG with St/PVA biocomposite films has been evaluated using Scanning Electron Microscopy (SEM), Fourier Transform Infrared Spectroscopy (FTIR) and X- Ray Diffraction (XRD) where SEM results revealed PEG and CF promoted compatibility among St/PVA films. During physiochemical analysis it was seen that the strength and rigidity of the films improved with the addition of PEG and CF. The water vapour permeability of the composite films first increased then gradually decreased up to 25 wt% cellulose fibers. All the synthesized films with PEG showed antioxidant properties up to 20% making them capable to be used in the food industry as active packaging material.