The disclosure provides for micro-encapsulated micro-organisms, and methods to produce the same. The micro-encapsulated micro- organisms can be coated on seed surface, which thereby enhances the growth potential of the plant, as micro-organisms colonise plant parts. Live organisms are encapsulated in permeable polymer, which allows permeation of cellular and nutritional contents to the core and enable controlled release of endophytes, and the microencapsulation protects micro-organisms against the toxic effects of pesticides/fungicides. Seeds coated with micro-encapsulated endophytes act as an efficient delivery vehicle for targeted application of microbes.