Travel and tourism are major source of foreign exchange in India. The potential employment opportunities in this sector have improved over time. This paper focuses on ecotourism and rural development in India, how ecotourism can help rural communities to sustain their livelihood in India and what the governmental policies are towards this rural ecotourism development. It can have both positive and negative impacts on rural as well as urban communities. The Government of India published the development of ecotourism in its new Ecotourism policies and guidelines.