Rapid urbanization and industrial expansion in emerging countries like India have accelerated the development of infrastructure on soft soils. As engineers often face complexities while undertaking construction activities especially expansive soils are encountered. In the present study, a novel binder is developed by blending fly ash (FA) with red mud (RM) to modify the properties of an expansive soil and the performance is evaluated by conducting compaction, unconfined compressive strength (UCS) and California bearing ratio (CBR) tests. The soil is treated with different percentages of FA from 3 to 15% at the rate of 3% and the maximum UCS reported at 12% is considered as optimum. Further, the soil is treated using optimum fly ash content (OFA) blended with RM varying from 5 to 20% at an increment of 5%. An optimum content of RM obtained from strength tests is 15% (along with 12% of fly ash). As the existing subgrade soil is found unsuitable due to its low CBR of 0.92%, it needs treatment to match with the desired level of 5% as per IRC recommendations. Upon treatment, the CBR of treated subgrade soil is improved and the overall pavement thickness was reduced significantly. The actual strains on pavement layers were calculated using IITPAVE software to determine the optimal thickness of pavement for treated subgrades. Based on the present investigation, the binder is effective for subgrade applications of low-volume roads (LVR) while simultaneously serving as a long-term disposal option for fly ash and red mud.