Due to its extensive production of rice and wheat, the northern Indian state of Punjab has long been referred to as the breadbasket of India. But the excessive reliance on these two crops has led to a number of ecological, economic, and social problems, including soil erosion, water scarcity, declining yields, and farmer dissatisfaction. Crop diversification has been identified as a crucial strategy for Punjab's sustainable agricultural development as a solution to these problems. In order to promote crop diversification for sustainable agricultural development, this paper will analyse the current state of crop diversification in Punjab, identify the factors that influence crop diversification, and suggest ways to promote crop diversification for sustainable agricultural development. The study uses secondary data, including analysis of government reports and statistical data between the years 1981–1982 and 2021–2022, in order to meet the objectives of the current study. The Herfindahl index has been used in the current study to calculate agricultural diversification. The study discovered that the status of crop diversification in Punjab is declining regularly since 1981’s, with wheat and rice still predominating the pattern of crop production.