Agri-tourism is the latest concept in the Indian tourism industry, which normally occurs on farms. Agri-tourism is a form of agricultural multi-functionality it gives you the opportunity to experience the real alluring and authentic contact with the village life, taste the local veritable food and get familiar with the many farming tasks during the visit. It provides you the welcome break free from the daily busy and hectic life in the peaceful village environment. It gives you the chance to relax and reinvigorate in the pure natural environment, surrounded by splendid setting. It gives you the chance to see the real India and have the experience on the farm stay holidays. Many Indian farmers especially from Pune and Maharashtra currently involved in or are considering the use of agri-tourism as a mode of diversifying their farm operations. How they will achieve this is the challenge. The overall potential for agri-tourism can only be achieved if strategies to address and overcome their challenges are developed and implemented. This paper is an attempt to identifying the potential of agri-tourism in India by highlights major challenges in this issue with some useful recommendations.