Trance states have long been used within a healing context in India. The use of chant, evocation of trance through ritual, and altered states achieved through meditation has been a means for self-realization, psychological well-being, and increasing health. Indigenous psychologies have elucidated various types of states of consciousness. Folk healing traditions often utilize trance as a means to invoke health, and exist concurrently with modern, western forms of psychiatry and psychotherapy. Comparisons have been made between techniques such the western modality of hypnosis and meditation and yoga. Yoga-nidra (the yoga of sleep) is one of these practices. It is similar to hypnosis and other techniques of mind-body methods of healing used in psychotherapy. Yoga-nidra has been introduced as a contemporary, systematic process of healing by various schools of yoga, both on the subcontinent and in Western countries. These methods are purportedly developed from ancient yogic texts. This article will provide an overview of yoga-nidra, both its origins and current form of practice, as well as a short review of the literature on its efficacy. It will be compared to hypnosis, a systematic, mind-body, trance-inducing technique, used as an adjunct with western forms of psychotherapy. Suggestions will be presented for using these modalities to integrate indigenous concepts of spirituality and psychology and the western models of mental health delivery in contemporary India, and populations of Indian cultural origin living abroad.