Contemporary Indian English literature has witnessed a sustained and diverse engagement with myth, epic, and folk tradition, ranging from feminist revisionist retellings of the Mahabharata and Ramayana to popular mythological fiction, allegorical historical fiction, and dramatic reworkings of Sanskrit and folk narrative sources. This paper examines how contemporary Indian English writers reimagine myth and tradition not as nostalgic retreat but as an active, contested site through which modernity, gender, caste, political history, and cultural identity are negotiated. Drawing on myth criticism, postcolonial theory, and Indian literary scholarship, the paper undertakes a qualitative, thematic analysis of selected major works — including Chitra Banerjee Divakaruni's The Palace of Illusions, Kavita Kane's Karna's Wife, Salman Rushdie's Midnight's Children, Amish Tripathi's Shiva Trilogy, Ashok Banker's Ramayana series, Girish Karnad's Hayavadana and Naga-Mandala, and Arundhati Roy's The God of Small Things — organised around four recurring strategies: feminist mythological revisionism, myth as political and historical allegory, popular reinvention of epic narrative, and dramatization of folk tradition. The paper argues that these texts collectively demonstrate what Homi Bhabha terms cultural hybridity: myth and tradition are continuously reworked, translated, and contested rather than rejected or preserved unchanged, becoming a flexible discursive resource through which writers negotiate inherited narrative and modern consciousness. The paper concludes that this reimagining constitutes a distinctive, ongoing feature of Indian English literary production, with significant implications for how cultural identity is narrated in a postcolonial, globalising literary marketplace.