Water scarcity and pesticide-related environmental pollution are pressing challenges in modern agriculture. To overcome both of these concerns, conventional plastic mulch films (CPMFs) are widely used in dryland crops such as maize and vegetables. However, their application in paddy rice remains limited due to its unique agronomic requirements, including continuous or intermittent flooding and seedling transplanting. Moreover, wet and muddy conditions after harvest hinder CPMFs' retrieval, increasing the risk of residual plastic accumulation in soils. Recent advances in biodegradable plastic mulch films (BPMFs) present a transformative opportunity to overcome these challenges, offering comparable agronomic benefits to those of CPMFs while eliminating the need for post-use collection and disposal. This review synthesizes evidence on the potential of BPMFs in rice-based cropping systems, emphasizing improvements in water and pesticide use efficiencies and weed and disease management, reductions in greenhouse gas emissions, and compatibility with organic and low-input farming systems. Key technical, environmental, and socioeconomic barriers to large-scale adoption are identified, alongside targeted strategies to accelerate adaptability. By embedding BPMF technology within integrated paddy management, particularly in climate-stressed regions, the agricultural sector can advance toward a circular bioeconomy that aligns productivity with environmental stewardship.