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This article examines the potential of conservation agriculture (CA) in rainfed areas particularly in the arid and semi-arid regions of the Indian subcontinent. The CA practices under different types of rainfall, soil and production system were identified based on the analysis of studies undertaken in different agro-climatic regions of India. The net benefits from different suggested CA practices were estimated at current prices for the year 2010 based on the results of long-term experiments conducted at the Central Research Institute for Dryland Agriculture, Hyderabad, India and centres of its All-India Coordinated Research Project on Dryland Agriculture, which ranged from Rs 325 to 18,000 ha(-1). The capital requirement of various CA practices was also estimated. The analysis shows that CA in its broader context not only improves soil health but also gives higher net returns per unit of land to the farmers. However, the CA practices need to be adopted selectively in different rainfall, soils and agro-ecological situations. The advantage of CA practices can be availed in rainfed agro-ecology, if practised appropriately over long-term basis. Higher carbon sequestration through CA practices may also give additional benefits in terms of carbon emission reduction, if made easily tradable in future. However, for promotion of CA practices across diverse agro-ecologies, appropriate policy, and institutional and technology support would be a prerequisite.