The integration of digital technologies into education has dramatically reshaped pedagogical practices worldwide. In India, this shift carries unique implications for the promotion and revitalization of the Indian Knowledge System (IKS), which encompasses traditional sciences, philosophies, and cultural practices. This paper critically explores the role of digital tools in advancing IKS, addressing the effectiveness of digital versus traditional pedagogies, ethical and legal considerations, privacy in AI-based education, and stakeholder dynamics in innovation ecosystems. Drawing from empirical studies and theoretical frameworks, the research highlights the opportunities digital tools present-such as personalized learning, community-based collaboration, and immersive simulations-while also examining infrastructural, ethical, and socio-cultural challenges. The paper advocates for a balanced, inclusive, and ethically grounded digital approach to preserve and promote IKS within the evolving Indian educational landscape.