India's Indian Knowledge Systems (IKS)—encompassing Vedas, Upanishads, Charaka Samhita's Ayurveda, Aryabhata's astronomy, and ecological insights from Vrikshayurveda—embody millennia-spanning wisdom on health, cosmos, ethics, and sustainability. Threatened by physical decay of palm-leaf manuscripts and birch bark texts, these treasures demand urgent digital intervention. Libraries emerge as frontline stewards, orchestrating advanced technologies including AI-powered Optical Character Recognition (OCR) for Devanagari scripts, hyperspectral scanning to unveil hidden inks, blockchain for immutable provenance, and VR/AR for immersive reconstruction of ancient observancies like Jantar Mantar.This paper delineates libraries' comprehensive role through flagship platforms: National Digital Library of India (NDLI) with its 10 crore+ resources linking Rigveda hydraulics to civil engineering; Traditional Knowledge Digital Library (TKDL) safeguarding 3.5 lakh medicinal formulations against biopiracy; and IGNCA's Kala Nidhi multimedia archive of 200,000 folk artifacts. It explores AI-driven research breakthroughs—NLP cross-mapping Sulba Sutras to Euclidean geometry, predictive degradation analytics—and pedagogical revolutions, where B.Ed. programs integrate Gheranda Samhita mindfulness via adaptive QR-linked modules, yielding 45% retention gains.Addressing challenges like 82% undigitized holdings, rural connectivity gaps, and ethical consent for tribal lore, the study proposes strategic roadmaps: CSR-funded scanner consortia, AICTE librarian upskilling for 1 lakh professionals, dialect-specific LLMs achieving 99% OCR fidelity, and solar-powered edge kiosks. Enriched with workflow diagrams, conservation photos, and impact matrices, this work aligns with NEP 2020's cultural renaissance mandate, positioning libraries as alchemists transmuting archival dust into global pedagogical fire. By 2030, quantum-enhanced libraries could decrypt Indus scripts, powering India's knowledge economy through metaverse Takshashila symposia and bio-digital Charaka herb simulations.