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Developing countries are searching for alternative energy options to promote sustainable and equitable development. Bioenergy, especially as a modernized fuel, is known to be an environmentally-sound energy option, but its potential and impacts need to be assessed for each developing country. The current sources, uses, and socio-economic and environmental impacts of biomass energy are analysed for India. The energy needs for development are assessed. Conventional energy planning has not led to equitable and sustainable development. Bioenergy options are shown to have potential to meet the energy needs of rural areas of a populous country like India. Case studies of successful bioenergy projects and economic analysis of bioenergy options are presented. Land is not a constraint to producing woody biomass for energy even in a densely populated country like India. Bioenergy options provide significant socio-economic benefits along with large potential for carbon-emission reduction and promotion of biodiversity in degraded lands. The potential for bioenergy is high for developing-countries of South-east Asia, Sub-Saharan Africa, and South America. There is global interest in bioenergy as a sustainable energy and green house gas emission reduction option. The Indian case study could be a model for other developing countries.