This paper looks at the potential of agro-ecology for farming systems in India in order to achieve sustainable and inclusive development of agriculture in the country. It situates the potential of agro-ecology within the larger structural transformation context of the rural, agricultural and smallholder Indian economy, arguing that the preponderance of the smallholders in India is in contrast to the accepted view and past experiences of development. This calls for the exploration of alternative approaches to the development of agriculture in India. Using the case of ‘Natural Farming’ in Andhra Pradesh, the paper explores the impact and constraints of adopting agroecology on smallholder agriculture through the four indicators of impact of CNF on quality of soil, crops, food and life, the impact of CNF on diversification of farming and sources of income costs, yields and value of crop output in a comparative perspective and farmers’ participation in and practices of CNF. State support is imperative for the stable and gainful adoption of these initiatives at a large scale, which can provide livelihood security to the farmers of the country.