The objective of this study is to create a biostimulant formulation that will improve soil health and drought tolerance by utilizing plant-derived protein hydrolysates (PHs) and bacterial exopolysaccharides (EPS). EPS were selected for their potential to enhance soil structure and water retention, while protein hydrolysates were included for their plant growth-promoting properties. This research focuses on EPS extraction from microbial sources and protein hydrolysate preparation, culminating in a combined biostimulant product tested for agricultural efficacy. Bacillus altitudinis A1 produced the highest EPS of 70.0 g L-1 after 14 days of incubation in Sabouraud Agar Base (SAB) medium among the four cultures evaluated. Since soymeal was identified earlier as having higher protein content, extraction was conducted and the yield was determined to be 43.8 % crude protein, which resulted in 8.6 mg g-1 total amino acids upon hydrolysis with papain enzyme. Soil incubation studies conducted with two types of soils viz. sandy loam and clay soils, demonstrated the potential of the EPS based biostimulant in improving physical properties such as pore space, bulk density and water holding capacity. Further this study investigated the effect of the biostimulant on seedling vigor of green gram (Vigna radiata) under varying osmotic stress levels ranging from -3 bar to -6 bar induced by polyethylene glycol (PEG). Based on the results, EPS biostimulant performed best in terms of the seedlings' growth and vigor, indicating that it should be used in water-limiting settings to lessen the stress on plant performance. An increase in early vigour of the plants will be helpful for the plants to perform better in the field. The GC-MS analysis of extracted bacterial EPS showed the presence of different types of decanoic acids, indicating potential for biocontrol. The FTIR (Fourier Transform Infrared Spectroscopy) spectrum of EPS revealed the presence of C-H, C=O and O-H stretches. This study provides valuable insights into the potential of EPS-based biostimulants as a sustainable solution to enhance drought resilience in crops, with future research needed to explore long-term effects and to optimize for large-scale applications.