Bio-compostable films are needed for food packaging to maintain circular economy. Water vapour transmission rate (WVTR) is important factor in these packaging films which can be controlled by blending and incorporation of nano fillers. Polybutylelne adipate terphalate (PBAT)/ Polylactic acid (PLA) blend filled with Halloysite nano tubes (HNT) were successfully solution casted by using doctor blade method. Polyethylene glycol, PEG 400 and TritonX-100 were used as the dispersing agents for incorporation of HNT in the range of 0 to 2 wt%. All the samples were characterized for structure, morphology, mechanical and thermal properties. WVTR, and shelf life studies for green vegetables were carried out in ambient conditions. The results indicated improvement in mechanical properties of 80PBAT/20PLA/HNT filled blends compared to unfilled blends. TritonX-100 gave better dispersion of HNT than PEG400. as evidenced from XRD, SEM and FTIR analysis. Considerable decrease in WVTR was found by the addition of HNT in presence of PEG400 and TritonX-100. The effect was more pronounced in TritonX-100 since it helps to improve chain stiffening effect as reported in earlier studies. The DSC studies indicated increase of crystallinity of HNT filled blends which leads to reduction of WVTR. The evaluation of green vegetables preservation studies by different films showed that there was rapid ripening and deterioration of green vegetables as indicated by red color and shrinkage of the product in the standard low density polyethylene (LDPE) pouches and films without HNT. On the other hand in the presence of HNT the ripening rate was decreased considerably and original green color as well as freshness of green vegetables were maintained over the period of two weeks at ambient temperature conditions.