Soil salinity is a major constraint to agriculture in coastal regions adversely affecting plant growth and crop yield. Halotolerant microorganisms adapted to saline conditions offer potential for the development of biological strategies in salt-affected soils. In particular, halotolerant plant growth–promoting rhizobacteria (PGPR) with indole-3-acetic acid (IAA) production potential can mitigate salinity stress and enhance crop performance. The present study aimed to isolate halotolerant bacteria from Kaipad saline paddy fields in Kerala, screen them for IAA production, and characterize selected isolates morphologically and biochemically. Four potent bacterial isolates were obtained and evaluated for colony morphology, Gram reaction, motility, and key biochemical traits including catalase, oxidase, amylase, esculin hydrolysis, H2S gas production, and acid production from carbohydrates. All the four isolates exhibited halotolerance and produced IAA under saline conditions indicating their potential for further evaluation as plant growth-promoting candidates. These findings suggest that the isolated halotolerant, IAA-producing rhizobacteria are promising candidates for development as bioinoculants to improve crop productivity in salinity-affected agricultural systems.