This paper explores how watershed development, an ecosystem-based approach for development of rain-fed regions in India, is gaining traction and political support, and its potential contribution to poverty reduction, food security, and climate change adaptation. It examines how economic valuation can improve our understanding of watershed development and how to overcome challenges related to data collection, valuing direct and indirect benefits, and climate change adaptation. A benefit-cost analysis was conducted of the Watershed Organisation Trust's watershed development project in Maharashtra, India and an examination done of their recent Climate Change Adaptation Project.