There exists tremendous potential for the growth of sustainable economic growth and employment generation in the traditional handicraft and cottage industry of rural India. Although these industrial activities are of cultural importance and have collectively contributed to local economies, they are disappearing as a result of rapid industrialization, globalization, and competition from mass production. This research investigates how these sectors can be revitalized to help India achieve sustainable development in the 21st century, by creating employment, reducing poverty, and preserving cultural heritage. This study draws on statistical data, case studies, and successful global examples to identify key barriers including lack of infrastructure, marketing challenges, lack of access to finance, and competition from mass-produced goods. It also provides strategies to cope with these challenges such as skill development, opening up of microcredit access, market diversification, export promotion, and regulatory reforms. The research shows that government policies play a critical role in subsidizing and incentivizing, promoting geographical indications for handicrafts, and simplifying business regulations. It encourages inclusive entrepreneurship in rural areas, empowering artisans and entrepreneurs (women and youth), along with creatively co-creating livelihood and business opportunities. Revitalizing traditional industries can help achieve multiple Sustainable Development Goals (SDGs) such as decent work, economic growth, and responsible consumption and production, according to the findings. This study offers a roadmap for policymakers, entrepreneurs, and other stakeholders to enable the sustainable growth of traditional industries across the villages of rural India while maintaining economic growth and cultural preservation for long-term resilience and prosperity