The Indian Knowledge System (IKS), rooted in the Vedas and extended through classical philosophical, literary, and scientific traditions, has profoundly influenced world literature across centuries. From metaphysical speculation in the Upanishads to ethical frameworks in the Bhagavad Gita and aesthetic theories in the Natyashastra, Indian thought has shaped intellectual discourses beyond geographical boundaries. This paper explores the reflection and transformation of Indian Knowledge Systems in global literary narratives—from ancient cross-cultural exchanges to modern and postmodern reinterpretations. It examines how concepts such as dharma, karma, moksha, non-dualism, cosmic order, and ecological harmony permeated Western transcendentalism, Romanticism, modernist poetry, postcolonial literature, and contemporary global fiction. The study further analyses descriptive theoretical frameworks including comparative literature, postcolonial theory, intertextuality, and cultural transmission models to trace these intellectual journeys. By mapping the trajectory from the Vedas to modern global narratives, this paper demonstrates that Indian Knowledge Systems are not static relics of antiquity but dynamic intellectual traditions that continue to shape global storytelling, ethics, philosophy, and identity discourse.