India is in a state of transition between massively transformed 'modern' lifestyles on one hand and the influence of traditional values and customs on the other. In view of the current realities of urbanization, migration, globalisation and societal transformation, the mental health treatment needs have become complex. The article highlights the existing mental health issues and traces the development of various psychotherapeutic techniques in India. An effort has been made to look into the basic tenets of the Indian culture which have a bearing on the conceptualisation and practical application of psychotherapy in the Indian setting. The cross-cultural relevance and adaptability of western psychotherapies in multi-ethnic and collectivistic Asian culture are discussed. In view of the differences between the eastern and western approaches to mental health, challenges in culturally-responsive adaptations are highlighted. It is seen that psychological interventions among masses are beneficial if indigenous approaches based on paradigms like themes from Gita, are cross-fertilized with western psychotherapy. However, there is a need to generate empirical evidence for indigenization of psychological treatments.