The water potential of rhizospheric soil is a key parameter that determines the availability of water, oxygen, and nutrients to plants and microbes. Recent global warming trends and erratic precipitation patterns have resulted in the emergence of drought as a major constraint of agricultural productivity. Though several strategies are being evaluated to address this issue, a novel approach is the utilization of microbes for alleviation of drought stress effects in crops. Citricoccus zhacaiensis B–4 is an osmotolerant actinobacterium isolated from banana rhizosphere on mannitol supplemented medium (−2.92 MPa osmotic potential). This isolate expressed plant growth promotion traits viz, IAA, GA 3 production, phosphate, zinc solubilization, ACC deaminase activity and ammonia production under PEG induced osmotic stress and non-stress conditions. Under in vitro osmotic conditions, biopriming with the actinobacterium improved the percent germination, seedling vigour and germination rate of onion seeds (cv. Arka Kalyan) at osmotic potentials up to −0.8 MPa. Considering its novelty, osmotolerance and plant growth promoting traits, biopriming with C. zhacaiensis is suggested as a viable option for the promotion of onion seed germination under drought stressed environments.