Polyols from chaulmoogra seed oil and grape seed oil were prepared by epoxidation and ring opening of oxirane ring using lactic acid in nitrogen atmosphere with a control over their functionality. Nanocellulose was derived from Desmostachya Bipinnata grass leaves and further surface functionalized. Modified nanocellulose was used as filler to prepare porous flexible bio-based polyurethane nanocomposites via in-situ polymerization. Adsorption of malachite green (MG) dye from wastewater using the prepared polyurethane composites was carried out. The effect of varying factors such as weight percentage of filers (modified nanocellulose), dosage of the adsorbent, pH, temperature and time on the MG adsorption have been studied experimentally. Material characterization for prepared materials was carried out using FTIR, NMR, TGA, DSC, and SEM along with other physical and chemical methods. FTIR results indicated the presence of peaks at 1704 cm−1 for –C=O stretching vibrations from urethane groups, 1531 cm−1 for –NH bending, 1232 cm−1 for –C–N stretching and 1105 cm−1 for –C–O stretching in the urethane group (–NHCOO–) thus, indicating the formation of urethane linkage in the polyurethane. Polyols with functionality around 2.8 were obtained from the oils, which has contributed to forming flexible polyurethanes. Morphological studies indicate the nano fibrillation of cellulose and closed-cell porosity in polyurethane and its composites. The flexible porous PU and its nanocellulose composites displayed improved thermal stability from 256.3°C to 270.5°C. Taguchi’s L27 orthogonal array have been applied for experimental design and optimization and the results were analyzed using ANOVA for raw and S/N ratio. It was found that pH is the most influential factor for adsorption lead by quantity of nanocellulose, time, dosage of the adsorbent and temperature.