The gray blight incited by Pestalotiopsis and allied genera is a prevalent disease affecting tea cultivation, and managing it with Trichoderma spp. is an alternative to synthetic fungicides. Plants modify their arsenal system against pathogens when they are exposed to Trichoderma spp., which produces proteins and enzymes associated with pathogenesis. Understanding the expression pattern of defense-related markers will help in developing gray blight resistance tea cultivars. Thus, this study intended to induce resistance against gray blight in tea by Trichoderma harzianum TIND02. For this, a total of eight Trichoderma isolates originated from organic tea rhizospheres were characterized and evaluated for their efficacy. Dual culture test revealed isolate TIND02 as the most potential candidate with 74.6% inhibitory activity against gray blight pathogen Pseudopestalotiopsis theae. Molecular characterization based on ITS and tef-1 alpha genes confirmed isolate TIND02 as T. harzianum. Scanning electron microscopic study showed the mycoparasitic nature of T. harzianum TIND02 (TH-TIND02) to Ps. theae. The ethyl acetate extract of TH-TIND02 at 100 and 200 μg mL−1 showed potential inhibitory activity (>69.9%) against Ps. theae which confirmed the presence of higher volatile metabolites. Gas chromatography–Mass spectrometry study revealed that ethyl acetate extract of TH-TIND02 was composed of 21 major and minor volatile organic compounds with acetamide, 2, 2, 2-trifluoro-N, N-bis trimethyIsilyl–C (94.74%) as a major component. The isolate also produced chitinase, cellulase, β-1, 3 glucanase, and protease hydrolytic enzymes. Nursery experiments revealed that 2% and 5% doses (2 × 106 CFU mL−1) of TH-TIND02 significantly reduced respective 65.0% and 70.0% disease severity over control with improved plant growth. Besides, expressions of defense-related enzymes (chitinase, pHenolics, peroxidase, phenylalanine ammonia lyase, β-1, 3-glucanase, and polyphenol oxidase) and pathogenesis-related genes (chitinase and β-1, 3-glucanase) due to TH-TIND02 were determined. The secretion of defense-related enzymes was highly upregulated in plants applied with TH-TIND02 followed by Ps. theae inoculation compared to controls. The RT-qPCR analysis showed that the expression of both genes in co-inoculated plants was two-fold higher than in control after 21-day post incubation. These results suggest that TH-TIND02 application reduced gray blight severity by elevated enzyme activity and overexpressed pathogenesis-related genes in tea plants which offer for its eco-friendly and sustainable use as a bio-fungicide in tea gardens.