The agricultural sector produces around 140 billion metric tonnes of biomass annually; however, region-specific wastes such as palmyra shells remains underutilised despite their potential as precursor for carbon nanomaterials (CNMs) synthesis. drought severely limits rice cultivation and can reduce grain yield by up to 50 % under severe moisture stress. Despite increasing significance of biomass-derived CNMs, research gaps exist in conversion of shell waste into CNMs, development of synthesis-property correlations and experimental evidence of their biological efficacy in alleviating drought stress. The research gap was addressed by synthesising carbon dots (CDs) and graphene oxide (GO) from shell waste and evaluating their seed priming effectiveness subjected to polyethylene glycol (PEG) -induced stress. The main hypothesis was to produce stable CNMs for improving seed germination, antioxidant regulation and early growth under drought. The objectives of the study were to optimise the synthesis of CDs and GO using response surface methodology, characterise their physicochemical properties and evaluate their seed priming effects on rice under PEG-induced drought stress using concentrations ranging from 5 to 100 ppm. Optimised conditions produced 26.8 % CDs at 600 °C pyrolysis temperature /120 min pyrolysis time/10 min ultrasonication time and 6.2 % GO at KMnO₄ : C ratio of 3 : 1, oxidation temperature of 35 °C for oxidation time at 3 hr. CDs (2.26–4.01 nm) and GO (11.5–18.9 nm) exhibited uniform morphology, π–π and n–π ultra violet–visible (UV–Vis) transitions, quantum confinement driven photoluminescence, zeta of -36.2 mV (CDs) and -36.98 mV (GO), oxygenated surface functionalities (FT-IR), defect-associated Raman signatures (ID/IG = 1.2 for CDs and 1.16 for GO) and amorphous carbon structures. Seed priming with CDs at 75 ppm increased germination to 98 %, enhanced seedling vigour (2608), increased antioxidant activities (25–38 %) and reduced malondialdehyde (MDA) by 57.8 %. The enhanced drought tolerance was associated with improved antioxidant defense and reduced oxidative membrane damage under PEG-induced osmotic stress, while higher doses caused phytotoxic effects. This work establishes circular, waste-derived nano-priming strategy with strong potential for early drought mitigation and field translation, supporting SDGs 1, 12 and 13. The study addresses existing research gaps related to biomass-to-CNMs conversion, synthesis–property Optimisation and biological validation of Palmyra shell-derived nanomaterials under drought stress.