Economic growth often leads to increased consumption and materialism, resulting in rising textile waste, that accumulates in wardrobes or landfills, posing environmental and societal challenges. This growth, however, does not benefit all, particularly in rural and remote areas that face unemployment and limited access to improved lifestyles. This research explores transforming textile waste into a means of job creation through upcycling, downcycling, and sustainable design practices. Using both quantitative and qualitative methods, it investigates the market potential of upcycled products and the need for skill development in upcycling and responsible resource use. Collaboration between local communities, NGOs, educational institutions, and designers is emphasized to create a product-service system (PSS) that connects waste generators, upcyclers, and buyers. This ensures a reliable material supply and market access for upcycled goods. The research also advocates for infrastructure development and supportive policies to foster sustainable waste management and job creation in the upcycling sector. The approach has been implemented in rural areas of Assam, receiving positive feedback from communities, demonstrating its potential for wider application. Scaling up this initiative could empower rural communities, promote resource management, and contribute to a sustainable future.