Rapid spread of artificial intelligence (AI) and digital business models in recent years has changed rural market systems in India. AI-powered markets and e-commerce systems challenge long-standing indigenous economic patterns even as they offer equitable development and market expansion. From a geographical standpoint, this research paper evaluates the twin effects of digital disruption on conventional Indian rural economy. The paper explores how digital business models reinterpret local supply networks, livelihoods, and market geographies by combining artificial intelligence-driven market analytics with geographical data analysis. Combining GIS mapping, primary surveys, and case studies- spanning various rural areas of India, the mixed-method approach reveals both disruptive and synergistic patterns. Results show notable regional differences in digital adoption and socioeconomic results; while digitally developed areas show favourable synergies, underdeveloped areas suffer increased inequality. To support inclusive rural entrepreneurship, the report presents policy proposals for region-specific digital policies that harmonise AI innovation with indigenous knowledge systems.