This study assessed the economic impacts of direct seeding of rice as an alternative crop establishment method for farmers in rice-wheat systems in Uttarakhand, Uttar Pradesh, and Bihar, India. Specifically, it examined the changes in farmers’ inputs (labor and materials) and level of productivity and incomes between direct-seeded (DSR) and transplanted (TPR) rice, and measured the economic returns on investment in direct seeding. Analyses included comparison of means, cost and return, and economic surplus framework. The average yield of DSR across sample farms in all three states was 5 percent lower than that of TPR. On the other hand, wheat yield increased by 9 percent after adopting DSR. The net present values (NPVs) of direct seeding in rice-wheat systems in Uttarakhand, Uttar Pradesh, and Bihar were USD 41 million, USD 32 million, and USD 44 million, respectively. The corresponding benefit-cost ratios were estimated at 46, 36, and 50. The NPVs of direct seeding in rice production alone in Uttarakhand, Uttar Pradesh, and Bihar were USD 33 million, USD 23 million, and USD 31 million, respectively. Hence, the greater proportion of benefits from DSR adoption was derived from the change in rice production. In sum, DSR is a profitable option in rice-wheat systems and is appropriate for diffusion.