This paper provides a comprehensive analysis of the integration of AI and IoT into sustainable transportation, emphasizing the broad definition of sustainable transportation and its role in social, economic, and environmental well-being. It explores the challenges facing modern transportation systems, the importance of sustainable mobility, and the potential of AI and emerging technologies to revolutionize transportation. The paper delves into the application of AI and IoT in optimizing traffic flow, enhancing safety, and orchestrating real-time traffic intelligence. It also highlights the potential of AI and emerging technologies in transforming Indian Railways, addressing challenges related to efficiency, safety, passenger experience, and environmental sustainability.