<p>Forests play a critical role in climate change mitigation by storing atmospheric carbon in biomass and soil pools, particularly in tropical dry deciduous ecosystems that remain underrepresented in carbon accounting studies. Teak (<i>Tectona grandis</i>) forests are ecologically and economically important in India, yet site-specific assessments of carbon stock and associated economic value are limited. This study aimed to quantify vegetation and soil carbon stocks of teak-dominated forests in Adilabad District, Telangana, and to estimate their economic value under prevailing carbon market prices. A total of 49 sample plots (20 m × 20 m) were established across three forest divisions using systematic sampling. Tree biomass was estimated using volume-based methods and IPCC default factors, while soil organic carbon was determined at 0–15 cm and 15–30 cm depths using the Walkley–Black method. Total carbon stock (tree + soil) was calculated as the sum of vegetation and soil carbon and converted to CO₂ equivalents (CO₂e) using a factor of 3.667. Mean Total carbon stock (tree + soil) ranged from 192.8 to 243.7 t C ha⁻¹ across divisions, corresponding to 707.1–893.7 t CO₂e ha⁻¹. Utnoor division recorded the highest biomass (477.5 t C ha⁻¹) and carbon stock (238.76 t C ha⁻¹). Soil organic carbon was significantly higher in surface layers (0.92%) compared to subsoil (0.43%). At a carbon price of US $90 t⁻¹ CO₂e, the estimated economic value ranged from US $63,637 to US $80,434 per hectare. The findings highlight the substantial carbon storage capacity of teak forests in tropical dry deciduous regions and support their integration into forest-based climate mitigation and carbon market strategies under India’s Nationally Determined Contributions.</p>