Tourism may be explained as a socio-economic activity which has enough competence to create large scale employment without compromising with the environment and the ecology of tourism destination. According to UNWTO, ‘Rural Tourism is a type of tourism activity in which the visitor’s experience is related to a wide range of products generally linked to nature-based activities, agriculture, rural lifestyle / culture, angling and sightseeing’. Rural area has the features that are un-urban in its own way such as lower population density, exquisite landscape and most of the land usage is dominated by agriculture and forestry along with traditional social structure and lifestyle. It implies those conditions that are unmatched with urban areas. Budget being key element, there is a concern for travel transportation and accommodation. After that the tourist place must add ‘value’ or perception related to this tour. For instance, the origin of remarkable arts has often been in villages. Applique art work of Pipili gain prominence, recognition and significant tourism site due to the master artisans who create the artistic canopy for the Rath yatra every year at Jagannath Temple, Puri since 10th century. Likewise, Pochampalli village in Tamil Nadu is world famous for its IKAT products handwoven in both silk and cotton. Mana Village, located in Chamoli District is popularly known as the ‘last Indian village’ from the border of India and China’ in the Himalayas. This identity is itself very exciting for many Indian travellers to visit here at least once, apart from its scenic views and mythological significance. The Uttarakhand Government interestingly calls it “Tourism Village.” Furthermore, Mattur village in Karnataka takes pride in being purely Sanskrit speaking residents. When a particular village is able to provide that value, its pollution free environment, closeness to roots, rich culture and traditions provide that escapism and a much needed change from day to day life. When a person decides to become a tourist, different stakeholders become a part of his tourism experience. From State government to local Panchayat, from religious groups to travel operators, from tour guides to travel agencies, all these play an important role accomplishing objectives of tourism. When these stakeholders share a common vision of promotion of tourism in village gets fulfilled, which implies employment generation, economic upliftment. This paper attempts to study all key factors that makes village tourism attractive, challenges and opportunities faced. An attempt is also made to understand its advantages and disadvantages as a contributor to the Indian economy.