Background Anemia is a widespread, worldwide hematological disorder, with iron deficiency anemia (IDA) and thalassemia trait (TT) being two frequently encountered forms. For effective management, it is vital to distinguish between these two conditions. Existing diagnostic methods have some limitations due to their inaccessibility and high cost. This study aims to evaluate novel hematological indices for distinguishing IDA from TT, offering potential improvements in diagnostic accuracy and patient care. Objective To compare the efficacy of novel hematological indices in differentiating IDA from TT, and to assess their sensitivity and specificity in clinical practice. Methods This cross-sectional observational study included 80 anemia patients (40 diagnosed cases of IDA and 40 of TT each). Hematological parameters were measured using the Sysmex XN-1000 analyzer (Sysmex Corporation, Kobe, Japan), and statistical analysis was conducted using the Mann-Whitney test, Pearson correlation coefficient (r), and correlation matrix. Results Significant differences were observed between IDA and TT patients in the indices studied. The Green and King Index demonstrated high diagnostic accuracy, with a sensitivity of 90% and specificity of 82%. The red cell distribution width (RDW) Index exhibited similar diagnostic performance, with a sensitivity of 90% and specificity of 77%. The England and Fraser Index showed a sensitivity of 85% and specificity of 80%, with a large effect size (r = -0.60). The correlation matrix revealed strong associations between key parameters, including a negative correlation between hemoglobin and RDWIndex (r = -0.61) and a positive correlation between mean corpuscular volume (MCV) and Shine and Lal Index (r = 0.82). On the other hand, our study found that indices like Shine and Lal and Srivastava had limited diagnostic value, with smaller effect sizes (r = 0.28 and r = -0.005, respectively). Conclusion Hematological indices, such as the Green and King, RDW, and England and Fraser indices, show strong potential for differentiating IDA from TT, with high sensitivity, specificity, and large effect sizes. The correlation matrix further supports the diagnostic utility of these indices. These tools can enhance diagnostic precision in resource-limited settings and improve patient outcomes.