Plant growth-promoting rhizobacteria (PGPR) is a microbial population found in the rhizosphere of plants that can stimulate plant development and restrict the growth of plant diseases directly or indirectly. In this study, 90 rhizospheric soil samples from five agro climatic zones of chilli (Capsicum annuum L.) were collected and rhizobacteria were isolated, screened, and characterized at morphological, biochemical, and molecular levels. In total, 38% of rhizobacteria exhibited the antagonistic capacity to suppress Ralstonia solanacearum growth and showed PGPR activities such as indole acetic acid production by 67.64% from total screened rhizobacteria isolates, phosphorus solubilization by 79.41%, ammonia by 67.75%, HCN by 58.82%, and siderophore by 55.88%. We performed a principal component analysis depicting correlation and significance among plant growth-promoting activities, growth parameters of chilli, and rhizobacterial strains. Plant inoculation studies indicated a significant increase in growth parameters, and PDS1 strain showed maximum 71.11% biocontrol efficiency against wilt disease. The best five rhizobacterial isolates demonstrating both plant growth-promotion traits and biocontrol potential were characterized and identified as PDS1—Pseudomonas fluorescens (MN368159), BDS1—Bacillus subtilis (MN395039), UK4—Bacillus cereus (MT491099), UK2—Bacillus amyloliquefaciens (MT491100), and KA9—Bacillus subtilis (MT491101). These rhizobacteria have the potential natural elicitors to be used as biopesticides and biofertilizers to improve crop health while warding off soil-borne pathogens. The chilli cv. Pusa Jwala treated with Bacillus subtilis KA9 and Pseudomonas fluorescens PDS1 showed enhancement in the defensive enzymes PO, PPO, SOD, and PAL activities in chilli leaf and root tissues, which collectively contributed to induced resistance in chilli plants against Ralstonia solanacearum. The induction of these defense enzymes was found higher in leave tissues (PO—4.87-fold, PP0—9.30-fold, SOD—9.49-fold, and PAL—1.04-fold, respectively) in comparison to roots tissue at 48 h after pathogen inoculation. The findings support the view that plant growth-promoting rhizobacteria boost defense-related enzymes and limit pathogen growth in chilli plants, respectively, hence managing the chilli bacterial wilt.