The greenhouse gases in the environment emitted from emissions of IC engine raises great concern for the survival of human beings, and it has a detrimental effect on the environment. There is a significant requirement to switch the energy source towards renewable as much as possible. From this viewpoint, oxy-hydrogen (HHO) gas was produced and tested in a CI engine. The HHO gas was supplied as a secondary fuel into the combustion chamber at the flow rates of 0–6 Litres/min (LPM) in the interval of 1 LPM through the intake manifold with the air along with biodiesel derived from novel feedstock Bauhinia variegate, injected at the blending percentage of 20%. The experiments were conducted at a constant crankshaft speed of 1500 rpm and varying load from 0 to 100% with intervals of 25%. The addition of biodiesel with conventional diesel fuel causes a decrease in brake thermal efficiency (BTE) and an increase in the brake-specific fuel consumption (BSFC) of the engine owing to its lower calorific value. This shortcoming has been overcome by inducting HHO gas at the intake manifold, resulting in an improved BTE and BSFC due to its high flame speed and high heating value leading to improved combustion. The result also indicates that the fuel enriched with HHO reduces significant exhaust emissions of carbon monoxide and unburned hydrocarbon except for NOx. The combustion characterization reveals that mixing HHO gas in biodiesel blends increases the peak in-cylinder gas pressure and heat release rate. The ideal flow rate of HHO was found at 3 LPM for maximum combustion, performance characteristics and minimum emissions characteristics, except NOx which continuously rises with increasing flow rate. The study reveals that the use of bauhinia variegate biodiesel in CI engines worsens the engine characteristics, but the induction of HHO gas can be a very promising renewable fuel to improve the worsening engine characteristics in terms of combustion, performance, and environmental issues.