This research study examines traditional and modern distribution channels in rural India’s agricultural markets. Traditional channels, including village traders, haats, and informal intermediaries, have historically shaped the flow of agricultural produce from farmers to consumers. However, they are characterized by inefficiencies, high transaction costs, limited market access, and information asymmetries. Modern distribution channels such as agricultural e-markets (eNAM), digital platforms (e-Choupal), cooperatives, and integrated value chains have emerged to address these challenges. The review synthesizes evidence demonstrating that modern channels increase price transparency, reduce intermediary exploitation, enhance market access, improve net returns for farmers, and support rural economic development. This paper argues that modern distribution channels, bolstered by digital technologies and institutional innovations, are more effective than traditional channels in improving welfare and sustainability in rural agricultural supply chains.