<p>The National Education Policy (NEP) 2020 marks a transformative shift in Indian education by positioning inclusive education as a cornerstone for equitable and holistic development, particularly during the foundational stage (ages 3&ndash;8 years). This review synthesises the conceptual framework of inclusion under NEP 2020 and the National Curriculum Framework for the Foundational Stage (NCF-FS, 2022), while examining global and contextual empirical evidence on inclusive models&#39; impacts on academic achievement, social acceptance and psychological well-being. Findings indicate consistent benefits for children with disabilities in cognitive and social domains, neutral to positive effects for typically developing peers and enhanced emotional outcomes through belonging and peer interaction. However, implementation gaps persist in India due to resource constraints and limited post-NEP empirical studies. NEP 2020&#39;s emphasis on play-based, multilevel pedagogies and universal access aligns with evidence-based inclusive practices, offering a pathway for holistic development. Recommendations include strengthened teacher preparation and longitudinal research to evaluate outcomes in Indian contexts.</p>