Increasing challenges of climate change, environmental degradation and rapid urbanisation imposes a regulatory call of imperishable development methods with reduced carbon footprint as its forefront. The emerging construction industry, overconsumption of fossil fuels and inefficient transportation networks fails to comply with safety measures of the urban residents, adding to the increased material waste and harmful emissions. The urgency for explorative strategies towards sustained ecosystems is more today than ever. While tracing the indigenous knowledge systems of the tribals, this paper aims to explore the concept of circular economy through the case of the Warli community. The emphasis shall be laid upon the documentation of the processes—social, environmental and physical to highlight the mutual dependency of the community with their environment. The study builds upon the discussion of tribal practices of mud surface finishes to address the practice of local material-based construction, adhering to the geographical ecosystem. The study would go on to analyze Mud as material for readaptation leading to reduced waste generation and lowered carbon footprint. The results would indicate that these have a direct effect on the physical and mental well-being of the community, thereby making it a sustained indigenous practice. Literature review, ethnographic survey and on-site documentation substantiates the study at all stages as gathered evidence.