Rural development interventions and conservation of resources in forested regions can be better informed with improved understanding of natural product trading and associated livelihood dynamics that operate mostly in informal economic settings. This study examined the income generating potential of six commercially traded forest products, i.e. Mahua flower (Madhuca latifolia), Lac (Kerria lacca), Bidi (processed leaf of Diospyros melanoxylon), oil seeds (Madhuca latifolia, Buchanania lanzan), Sal leaf (Shorea robusta) and Tendu leaf (Diospyros melanoxylon) in a dry deciduous forest region of India, and their significance in household economies. The rural poor were found to have diverse livelihood strategies where NTFP trading contributes on average 20% of cash income. The financial benefit accruing to households in NTFP commercialization are not uniform, and were impacted by entrepreneurship ability and value addition rather than family resources and period of trading engagement. Households trading in Bidi rolling alone could make as much as 60% of total household cash income that indicates the importance of designing policy to support marketing of NTFPs tailored to each value chain.