The Farmer Producer Organisations (FPOs) represent a key institutional innovation aimed at addressing the structural limitations of small and marginal farmers by enhancing collective bargaining power, improving market access and attaining economies of scale. Despite increasing policy support and expanding research, existing literature remains fragmented, particularly in explaining how financial, governance, infrastructural and socio-cultural factors influence FPOs' performance and sustainability. This narrative review synthesises evidence from India and comparable international contexts to give a thematic understanding of the roles, benefits and constraints associated with FPOs. The findings reveal that while FPOs highly contribute to reducing transaction costs and improving access to inputs and markets, their long-term sustainability depends on stronger institutional capacity, improved financial support and effective governance structures. It also identifies important research gaps related to gender inclusion, comparative assessments and longitudinal evaluation of large-scale national programmes. By consolidating dispersed evidence, the study provides a deeper understanding of the transformative potential of FPOs as an inclusive and sustainable instrument of agrarian development.