The integration of Indian Knowledge Systems (IKS) with Artificial Intelligence (AI) presents a transformative initiative spearheaded by the Ministry of Education, India. This endeavor seeks to combine ancient wisdom with modern technology, fostering a holistic paradigm that addresses contemporary challenges in a comprehensive manner. Rooted in centuries of philosophical, scientific, and spiritual exploration, IKS offers profound insights into the interconnectedness of all phenomena, contrasting with the more reductionist approach of Western scientific traditions. Central to IKS are principles such as holistic thinking, spirituality, and indigenous science, which provide a rich tapestry of knowledge for AI integration. In parallel, AI has emerged as a powerful tool with the potential to revolutionize various domains, from healthcare and finance to transportation and education. However, the predominant paradigms of AI often lack a holistic understanding of human consciousness, ethical decision-making, and sustainable development. The integration of IKS with AI aims to bridge this gap by incorporating philosophical concepts into AI decision-making frameworks, leveraging traditional ecological knowledge for sustainable resource management, and enhancing AI system robustness through contemplative practices. This initiative recognizes the importance of supportive policy and regulatory frameworks in facilitating the integration of IKS with AI. It emphasizes the need for updating educational curricula, providing cross-disciplinary training opportunities, and fostering interdisciplinary collaboration to nurture a new generation of researchers and practitioners who can bridge the gap between ancient knowledge and cutting-edge technology. This paper discusses about the holistic paradigm that integrates diverse perspectives and knowledge systems, to create innovative solutions that promote sustainable development, social equity, and environmental stewardship. Ultimately, it se