<p>Accurate assessment of genetic diversity using physiological and molecular marker-based approach helps to assess effective breeding activities. In our previous studies, eight indigenous finger millet genotypes were identified as having tolerant traits against drought after a comprehensive screening of over 32 indigenous genotypes from different locations of Koraput. In addition to two improved drought-tolerant check varieties (GPU 28 and <i>Chillika</i>), these eight genotypes were utilized for detailed molecular and physiological characterization under control and drought conditions. Drought stress led to a significant decrease in plant biomass, leaf gas exchange, PSII activity, leaf chlorophyll content, membrane stability index, and relative water content in studied finger millet genotypes relative to the control plants, with notable varietal differences observed. Remarkable increases in reactive oxygen species, proline content, and antioxidant enzymes were observed under drought stress. Genetic diversity of the investigated finger millet genotypes was evaluated using ten previously reported SSR markers associated with drought tolerance traits. The mean value for polymorphism information content (PIC), marker index (MI), and resolving power (RP) were 0.19, 0.47, and 0.72, respectively. Taken together, five traditional finger millet genotypes (<i>Bati</i>,<i> Bhalu</i>,<i> Biri</i>,<i> Ladu</i>, and <i>Lala</i>) are more genetically closer to tolerant check variety (GPU 28 and <i>Arjuna</i>). However, three genotypes (<i>Telugu</i>, <i>Tumuka</i>, and <i>Dushera</i>) exhibit a significant genetic distance from GPU 28. The degree of genetic variants obtained could be useful for germplasm conservation and global implications in relation to drought tolerance.</p>