Drought stress poses a significant threat to rice productivity, particularly when rice is cultivated through the direct seeded system (DSR). This paper aimed to isolate and characterize drought-tolerant plant growth-promoting rhizobacteria (PGPR) from rice rhizospheric soils in arid and semi-arid areas of Pakistan and assess their efficacy in improving rice growth under drought conditions. Six isolates exhibited PGPR traits such as phosphate solubilization, indole 3-acetic acid production, ACC deaminase activity, siderophore production, and osmolyte accumulation. Pot experiments under drought stress (60% field capacity) demonstrated that inoculation with PGPR enhanced the germination rate, chlorophyll level, water status, membrane stability, and biochemical parameters in rice exceptionally. Among these, isolate NRC13, identified as Bacillus velezensis, showed the greatest efficacy in enhancing physiological, biochemical, and yield characteristics, including grain yield and 1000-grain weight under drought stress. This study provides the first evidence of Bacillus velezensis NRC13's application in direct-seeded rice under drought conditions in Pakistan, demonstrating the potential of this novel bio-inoculant to increase rice productivity and resilience in water-deficient settings.