This paper aims to examine the adoption and implementation of micro-credentials in Indian higher education within the context of evolving skill demands and digital transformation. Positioned as short, competency-based learning modules, micro-credentials are gaining global traction as tools to enhance employability and support lifelong learning. The study follows a descriptive qualitative research design based on thematic analysis of secondary sources, including policy documents, empirical research, and institutional reports. Findings reveal increasing policy support in India through NEP-2020, the National Credit Framework (NCrF) and the Academic Bank of Credits (ABC), which enable flexible, credit-based learning pathways. However, implementation remains limited due to challenges such as low institutional readiness, inadequate digital infrastructure, limited employer recognition, and the absence of standardisation frameworks. The study argues that micro-credentials should complement rather than replace traditional degrees, offering targeted skill enhancement aligned with industry needs. The paper concludes by recommending capacity-building initiatives, national quality assurance standards, strengthened industry partnerships, and context-specific pilot models to support scalable adoption. The review highlights significant implications for higher education reform, workforce preparation, and policy design in India.