Bio-indigo is one of the oldest natural dyes known for its classical blue hue and excellent biocompatibility. Traditionally, bio-indigo is extracted from indigo plants via a conventional fermentation process that suffers from low yield, poor quality, and long processing time. Current work presents an enzymatic process using Trichoderma cellulase on Indigofera tinctoria (I. tinctoria) that experimentally demonstrated bio-indigo yield enhancement to 12.6 g/kg, whereas conventional process yield is limited to 6.4 g/kg. Comparative cradle-to-gate Life Cycle Assessments (LCAs) of bio-indigo production from conventional fermentation and integrated enzymatic hydrolysis processes were performed for pathway benchmarking. Environmental sustainability aspects for 14 environmental impact categories were exemplified using CML 2001, EF 3.0, ReCiPe 2016, and TRACI 2.1 methodologies. Comprehensive LCA using GaBi software demonstrated that the proposed enzymatic process had superior environmental compliance. A lower product carbon footprint is the preference of both manufacturers and customers today, and it can only be sought through environmentally friendly extraction processes. Results showed that production via an enzymatic process, compared to conventional fermentation, has ~49% lower environmental impact for almost all the assessed indicators. Additionally, the economic model indicated promising profitability and viable insight into the production route, revealing that sustainable practices can significantly enhance profitability.