Improving spikelet number without limiting panicle number is an important strategy to increase rice productivity. In this study, a spikelet number enhancing SPIKE-allele was identified from the aus subtype indica rice, cv. Bhutmuri, which has an identical japonica like corresponding sequence including retrotransposon sequence, usually absent in indica genotypes, like IR64. An allele-specific singletube PCR-based codominant marker targeting an A/G single-nucleotide polymorphism (SNP) at the 3ˊUTR was identified for easier genotyping. The yield enhancing ability of the Bhutmuri-SPIKE allele carrying RILs and NILs over IR64-SPIKE allele carrying alleles was due to increased number of filled grains/panicle. More than three times higher abundance of SPIKE transcripts was observedin Bhutmuri and NILs carrying this allele compared with IR64 and its allele carrying NILs. Higher rate of photosynthesis at more than 900 µmolm^-2s^-1 light intensity and more than six small vascular bundles between the two large vascular bundles in the flag leaves of Bhutmuri and its allele carrying NILs were also observed. The identified SPIKE allele and the marker associated with it will be useful for increasing the productivity of rice by marker-assisted breeding.