Dry tropical forest constitutes one of the most important forest types of the world. Tropical dry forests are characterized by functional traits like deciduousness and drought tolerance. Deciduousness is a phenological attribute expressing adaptation to seasonality and drought, resulting in minimized activities during the unfavourable season and resumption of growth with variable rates of resource use during the short favourable season. The present investigation suggested that the studied leaf traits and physiological attributes were strongly influenced by soil moisture availability across sites. Soil moisture availability was also the key driver for the variation in soil processes (litter decomposition and soil respiration). Leaf traits and soil processes were positively related with carbon sequestration across sites, and therefore in tropical dry forests leaf traits selected in the present study can be used to indicate carbon sequestration.