Application of seaweed extract in agriculture positively impacts the soil bacterial community structure and function and also contributes to growth and productivity of the crop by modulating soil ecology. Seaweed extract usage results in a beneficial bacterial shift under drought conditions, influencing either through root exudates or by associated endophytic bacteria. Microbial abundance significantly improved after KSWE application under drought. Flavobacterium, Nitrosomonas, Nitrosovibrio, Rubrobactergenera and several other bacterial taxa which are important for plant growth promotion and nutrient cycling were found to be enriched by KSWE application under drought conditions. Under stress conditions, KSWE treatments resulted in better yield indicating the contribution of altered soil ecology (increased microbial abundance, higher soil enzymatic activity).Kappaphycus seaweed extract is known to upregulate the genes involved in IAA, GA, and cytokinin signal transduction and downregulate the gene involved in ABA biosynthesis. Other key genes that were regulated are those involved in photosynthesis and nitrogen metabolism, polysaccharide synthesis, and signal transduction.