Mycobacterium indicus pranii (MIP) known for its immunotherapeutic potential against leprosy and tuberculosis is undergoing various clinical trials and also simultaneously being studied in animal models to get insight into the mechanistic details contributing to its protective efficacy as a vaccine candidate. Studies have shown potential immunomodulatory properties of MIP, the most significant being the ability to induce strong Th1 type of response, enhanced expression of pro-inflammatory cytokines, activation of APCs and lymphocytes, elicitation of M.tb specific poly-functional T cells. All of these form crucial components of host-immune response during M.tb infection. Also, MIP was found to be potent inducer of autophagy in macrophages which resulted in enhanced clearance of M.tb from MIP and M. tb co-infected cells. Hence, we further examined the component/s of MIP responsible for autophagy induction. Interestingly, we found that MIP lipids and DNA were able to induce autophagy but not the protein fraction. LAM being one of the crucial components of mycobacterial cell-wall lipids and possessing the ability of immunomodulation; we isolated LAM from MIP and did a comparative study with M.tb-LAM. Stimulation with MIP-LAM resulted in significantly high secretion of pro-inflammatory cytokines and displayed high autophagy inducing potential in macrophages as compared to M.tb-LAM. Treatment with MIP-LAM enhanced the co-localization of M.tb within the phago-lysosomes and increased the clearance of M.tb from the infected macrophages. This study describes LAM to be a crucial component of MIP which has significant contribution to its immunotherapeutic efficacy against TB.