diff --git a/.talismanrc b/.talismanrc
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+  - filename: packages/contentstack-import/test/unit/utils/logger.test.ts
+    checksum: 794e06e657a7337c8f094d6042fb04c779683f97b860efae14e075098d2af024
+  - filename: packages/contentstack-import-setup/src/import/modules/taxonomies.ts
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+version: '1.0'
diff --git a/package-lock.json b/package-lock.json
index 2616661021..77195390fc 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -26894,8 +26894,8 @@
         "@contentstack/cli-cm-export": "~2.0.0-beta.2",
         "@contentstack/cli-cm-export-to-csv": "~1.10.0",
         "@contentstack/cli-cm-import": "~2.0.0-beta.2",
-        "@contentstack/cli-cm-import-setup": "1.6.1",
-        "@contentstack/cli-cm-migrate-rte": "~1.6.2",
+        "@contentstack/cli-cm-import-setup": "1.7.0",
+        "@contentstack/cli-cm-migrate-rte": "~1.7.0",
         "@contentstack/cli-cm-seed": "~2.0.0-beta.2",
         "@contentstack/cli-command": "~1.6.2",
         "@contentstack/cli-config": "~1.15.3",
@@ -28370,7 +28370,7 @@
     },
     "packages/contentstack-import-setup": {
       "name": "@contentstack/cli-cm-import-setup",
-      "version": "1.6.1",
+      "version": "1.7.0",
       "license": "MIT",
       "dependencies": {
         "@contentstack/cli-command": "~1.6.1",
diff --git a/packages/contentstack-import-setup/README.md b/packages/contentstack-import-setup/README.md
index 490c7e5d61..41d492f0bc 100644
--- a/packages/contentstack-import-setup/README.md
+++ b/packages/contentstack-import-setup/README.md
@@ -47,7 +47,7 @@ $ npm install -g @contentstack/cli-cm-import-setup
 $ csdx COMMAND
 running command...
 $ csdx (--version)
-@contentstack/cli-cm-import-setup/1.6.1 darwin-arm64 node-v22.14.0
+@contentstack/cli-cm-import-setup/1.7.0 darwin-arm64 node-v22.13.1
 $ csdx --help [COMMAND]
 USAGE
   $ csdx COMMAND
diff --git a/packages/contentstack-import-setup/package.json b/packages/contentstack-import-setup/package.json
index aa0439f788..fa80aab692 100644
--- a/packages/contentstack-import-setup/package.json
+++ b/packages/contentstack-import-setup/package.json
@@ -1,7 +1,7 @@
 {
   "name": "@contentstack/cli-cm-import-setup",
   "description": "Contentstack CLI plugin to setup the mappers and configurations for the import command",
-  "version": "1.6.1",
+  "version": "1.7.0",
   "author": "Contentstack",
   "bugs": "https://github.com/contentstack/cli/issues",
   "dependencies": {
diff --git a/packages/contentstack-import-setup/src/config/index.ts b/packages/contentstack-import-setup/src/config/index.ts
index 782cce9ea4..ea7d40b0f9 100644
--- a/packages/contentstack-import-setup/src/config/index.ts
+++ b/packages/contentstack-import-setup/src/config/index.ts
@@ -22,6 +22,11 @@ const config: DefaultConfig = {
       fileName: 'custom-roles.json',
       dependencies: ['environments', 'entries'],
     },
+    locales: {
+      dirName: 'locales',
+      fileName: 'locales.json',
+      dependencies: [],
+    },
     environments: {
       dirName: 'environments',
       fileName: 'environments.json',
@@ -43,7 +48,7 @@ const config: DefaultConfig = {
     entries: {
       dirName: 'entries',
       fileName: 'entries.json',
-      dependencies: ['assets', 'marketplace-apps', 'taxonomies'],
+      dependencies: ['assets', 'extensions', 'marketplace-apps', 'taxonomies'],
     },
     'global-fields': {
       dirName: 'global_fields',
diff --git a/packages/contentstack-import-setup/src/import/modules/taxonomies.ts b/packages/contentstack-import-setup/src/import/modules/taxonomies.ts
index 9cfe57ea0c..38dcad4c9c 100644
--- a/packages/contentstack-import-setup/src/import/modules/taxonomies.ts
+++ b/packages/contentstack-import-setup/src/import/modules/taxonomies.ts
@@ -2,13 +2,14 @@ import { join } from 'path';
 import omit from 'lodash/omit';
 import isEmpty from 'lodash/isEmpty';
 
-import { log, fsUtil } from '../../utils';
+import { log, fsUtil, fileHelper } from '../../utils';
 import { ImportConfig, ModuleClassParams, TaxonomyQueryParams } from '../../types';
 import { sanitizePath } from '@contentstack/cli-utilities';
 
 export default class TaxonomiesImportSetup {
   private config: ImportConfig;
   private taxonomiesFilePath: string;
+  private taxonomiesFolderPath: string;
   private stackAPIClient: ModuleClassParams['stackAPIClient'];
   private dependencies: ModuleClassParams['dependencies'];
   private taxonomiesConfig: ImportConfig['modules']['taxonomies'];
@@ -16,18 +17,33 @@ export default class TaxonomiesImportSetup {
   private taxSuccessPath: string;
   private taxonomiesMapperDirPath: string;
   private termsMapperDirPath: string;
+  private localesFilePath: string;
+  private isLocaleBasedStructure: boolean = false;
   public taxonomiesMapper: Record<string, unknown> = {};
   public termsMapper: Record<string, unknown> = {};
+  public masterLocaleFilePath: string;
 
   constructor({ config, stackAPIClient }: ModuleClassParams) {
     this.config = config;
     this.stackAPIClient = stackAPIClient;
-    this.taxonomiesFilePath = join(sanitizePath(this.config.contentDir), 'taxonomies', 'taxonomies.json');
+    this.taxonomiesFolderPath = join(sanitizePath(this.config.contentDir), 'taxonomies');
+    this.taxonomiesFilePath = join(this.taxonomiesFolderPath, 'taxonomies.json');
     this.taxonomiesConfig = config.modules.taxonomies;
     this.taxonomiesMapperDirPath = join(sanitizePath(this.config.backupDir), 'mapper', 'taxonomies');
     this.taxSuccessPath = join(sanitizePath(this.taxonomiesMapperDirPath), 'success.json');
     this.termsMapperDirPath = join(sanitizePath(this.taxonomiesMapperDirPath), 'terms');
     this.termsSuccessPath = join(sanitizePath(this.termsMapperDirPath), 'success.json');
+    this.localesFilePath = join(
+      sanitizePath(this.config.contentDir),
+      config.modules.locales?.dirName || 'locales',
+      config.modules.locales?.fileName || 'locales.json',
+    );
+    this.masterLocaleFilePath = join(
+      sanitizePath(this.config.contentDir),
+      config.modules.locales?.dirName || 'locales',
+      'master-locale.json',
+    );
+
     this.taxonomiesMapper = {};
     this.termsMapper = {};
   }
@@ -41,21 +57,19 @@ export default class TaxonomiesImportSetup {
     try {
       const taxonomies: any = fsUtil.readFile(this.taxonomiesFilePath);
       if (!isEmpty(taxonomies)) {
+        // 1. Detect locale-based structure
+        this.isLocaleBasedStructure = this.detectLocaleBasedStructure();
+
         // 2. Create mapper directory
         fsUtil.makeDirectory(this.taxonomiesMapperDirPath);
         fsUtil.makeDirectory(this.termsMapperDirPath);
 
-        for (const taxonomy of Object.values(taxonomies) as any) {
-          let targetTaxonomy: any = await this.getTaxonomies(taxonomy);
-          if (!targetTaxonomy) {
-            log(this.config, `Taxonomies with uid '${taxonomy.uid}' not found in the stack!`, 'info');
-            continue;
-          }
-          targetTaxonomy = this.sanitizeTaxonomyAttribs(targetTaxonomy);
-          this.taxonomiesMapper[taxonomy.uid] = targetTaxonomy;
-          const terms = await this.getAllTermsOfTaxonomy(targetTaxonomy);
-          const sanitizedTerms = this.sanitizeTermsAttribs(terms);
-          this.termsMapper[taxonomy.uid] = sanitizedTerms;
+        if (this.isLocaleBasedStructure) {
+          log(this.config, 'Detected locale-based folder structure for taxonomies', 'info');
+          await this.setupTaxonomiesByLocale(taxonomies);
+        } else {
+          log(this.config, 'Using legacy folder structure for taxonomies', 'info');
+          await this.setupTaxonomiesLegacy(taxonomies);
         }
 
         if (this.taxonomiesMapper !== undefined && !isEmpty(this.taxonomiesMapper)) {
@@ -74,18 +88,176 @@ export default class TaxonomiesImportSetup {
     }
   }
 
+  /**
+   * Setup taxonomies using legacy format (root-level taxonomy files)
+   */
+  async setupTaxonomiesLegacy(taxonomies: any): Promise<void> {
+    for (const taxonomy of Object.values(taxonomies) as any) {
+      let targetTaxonomy: any = await this.getTaxonomies(taxonomy);
+      if (!targetTaxonomy) {
+        log(this.config, `Taxonomies with uid '${taxonomy.uid}' not found in the stack!`, 'info');
+        continue;
+      }
+      targetTaxonomy = this.sanitizeTaxonomyAttribs(targetTaxonomy);
+      this.taxonomiesMapper[taxonomy.uid] = targetTaxonomy;
+      const terms = await this.getAllTermsOfTaxonomy(targetTaxonomy);
+      if (Array.isArray(terms) && terms.length > 0) {
+        log(this.config, `Terms found for taxonomy '${taxonomy.uid}', processing...`, 'info');
+        const sanitizedTerms = this.sanitizeTermsAttribs(terms);
+        this.termsMapper[taxonomy.uid] = sanitizedTerms;
+      } else {
+        log(this.config, `No terms found for taxonomy '${taxonomy.uid}', skipping...`, 'info');
+      }
+    }
+  }
+
+  /**
+   * Setup taxonomies using locale-based format (taxonomies organized by locale)
+   * For locale-based structure, we query the target stack for each taxonomy+locale combination
+   */
+  async setupTaxonomiesByLocale(taxonomies: any): Promise<void> {
+    const locales = this.loadAvailableLocales();
+
+    for (const localeCode of Object.keys(locales)) {
+      log(this.config, `Processing taxonomies for locale: ${localeCode}`, 'info');
+
+      for (const taxonomy of Object.values(taxonomies) as any) {
+        // Query target stack for this taxonomy in this locale
+        let targetTaxonomy: any = await this.getTaxonomies(taxonomy, localeCode);
+        if (!targetTaxonomy) {
+          log(this.config, `Taxonomy '${taxonomy.uid}' not found in target stack for locale: ${localeCode}`, 'info');
+          continue;
+        }
+
+        targetTaxonomy = this.sanitizeTaxonomyAttribs(targetTaxonomy);
+
+        // Store with composite key: taxonomyUID_locale
+        // const mapperKey = `${taxonomy.uid}_${localeCode}`; // TODO: Unsure about this required or not
+        this.taxonomiesMapper[taxonomy.uid] = targetTaxonomy;
+        const terms = await this.getAllTermsOfTaxonomy(targetTaxonomy, localeCode);
+        if (Array.isArray(terms) && terms.length > 0) {
+          log(
+            this.config,
+            `Terms found for taxonomy '${taxonomy.uid} for locale: ${localeCode}', processing...`,
+            'info',
+          );
+          const sanitizedTerms = this.sanitizeTermsAttribs(terms);
+          this.termsMapper[taxonomy.uid] = sanitizedTerms;
+        } else {
+          log(
+            this.config,
+            `No terms found for taxonomy '${taxonomy.uid} for locale: ${localeCode}', skipping...`,
+            'info',
+          );
+        }
+      }
+    }
+  }
+
+  /**
+   * Detect if locale-based folder structure exists
+   * @returns {boolean} true if locale-based structure detected, false otherwise
+   */
+  detectLocaleBasedStructure(): boolean {
+    const masterLocaleCode = this.getMasterLocaleCode();
+    const masterLocaleFolder = join(this.taxonomiesFolderPath, masterLocaleCode);
+
+    // Check if master locale folder exists (indicates new locale-based structure)
+    if (!fileHelper.fileExistsSync(masterLocaleFolder)) {
+      log(this.config, 'No locale-based folder structure detected', 'info');
+      return false;
+    }
+
+    log(this.config, 'Locale-based folder structure detected', 'info');
+    return true;
+  }
+
+  /**
+   * Get the master locale code
+   * First tries to read from master-locale.json, then falls back to config, then 'en-us'
+   * @returns {string} The master locale code
+   */
+  getMasterLocaleCode(): string {
+    // Try to read from master-locale.json file
+    if (fileHelper.fileExistsSync(this.masterLocaleFilePath)) {
+      try {
+        const masterLocaleData = fsUtil.readFile(this.masterLocaleFilePath, true) as Record<
+          string,
+          Record<string, any>
+        >;
+        // The file contains an object with UID as key, extract the code
+        const firstLocale = Object.values(masterLocaleData)[0];
+        if (firstLocale?.code) {
+          log(this.config, `Master locale loaded from file: ${firstLocale.code}`, 'info');
+          return firstLocale.code;
+        }
+      } catch (error) {
+        log(this.config, 'Error reading master-locale.json, using fallback', 'warn');
+      }
+    }
+
+    // Fallback to config or default
+    const fallbackCode = this.config.master_locale?.code || 'en-us';
+    log(this.config, `Using fallback master locale: ${fallbackCode}`, 'info');
+    return fallbackCode;
+  }
+
+  /**
+   * Load available locales from locales file
+   * @returns {Record<string, string>} Map of locale codes
+   */
+  loadAvailableLocales(): Record<string, string> {
+    const locales: Record<string, string> = {};
+
+    // First, get the master locale
+    const masterLocaleCode = this.getMasterLocaleCode();
+    locales[masterLocaleCode] = masterLocaleCode;
+
+    // Then load additional locales from locales.json if it exists
+    if (!fileHelper.fileExistsSync(this.localesFilePath)) {
+      log(this.config, 'No locales file found, using only master locale', 'info');
+      return locales;
+    }
+
+    try {
+      const localesData = fsUtil.readFile(this.localesFilePath, true) as Record<string, Record<string, any>>;
+
+      for (const [uid, locale] of Object.entries(localesData)) {
+        if (locale?.code) {
+          locales[locale.code] = locale.code;
+        }
+      }
+
+      log(
+        this.config,
+        `Loaded ${Object.keys(locales).length} locales (1 master + ${Object.keys(locales).length - 1} additional)`,
+        'info',
+      );
+      return locales;
+    } catch (error) {
+      log(this.config, 'Error loading locales file, using only master locale', 'error');
+      return locales;
+    }
+  }
+
   /**
    * Retrieves the taxonomies based on the provided taxonomy UID.
    *
    * @param taxonomy - The UID of the taxonomy to retrieve.
+   * @param locale - Optional locale code to query taxonomy in specific locale
    * @returns A promise that resolves to the retrieved taxonomies.
    */
-  async getTaxonomies(taxonomy: any): Promise<any> {
+  async getTaxonomies(taxonomy: any, locale?: string): Promise<any> {
+    const query: any = {};
+    if (locale) {
+      query.locale = locale;
+    }
+
     return await this.stackAPIClient
       .taxonomy(taxonomy.uid)
-      .fetch()
+      .fetch(query)
       .then((data: any) => data)
-      .catch((err: any) => this.handleTaxonomyErrorMsg(err));
+      .catch((err: any) => this.handleTaxonomyErrorMsg(err, taxonomy.uid, locale));
   }
 
   /**
@@ -102,19 +274,22 @@ export default class TaxonomiesImportSetup {
    * Retrieves all terms of a taxonomy.
    *
    * @param taxonomy - The taxonomy object.
+   * @param locale - Optional locale code to query terms in specific locale
    * @param skip - The number of terms to skip (default: 0).
    * @param terms - An array to store the retrieved terms (default: []).
    * @returns A promise that resolves to an array of terms.
    */
-  async getAllTermsOfTaxonomy(taxonomy: any, skip = 0, terms: any[] = []): Promise<any> {
+  async getAllTermsOfTaxonomy(taxonomy: any, locale?: string, skip = 0, terms: any[] = []): Promise<any> {
     const queryParams: TaxonomyQueryParams = {
       include_count: true,
       limit: 100,
       skip,
+      depth: 0,
     };
 
-    if (skip >= 0) queryParams['skip'] = skip || 0;
-    queryParams['depth'] = 0;
+    if (locale) {
+      queryParams.locale = locale;
+    }
 
     await this.stackAPIClient
       .taxonomy(taxonomy.uid)
@@ -124,10 +299,10 @@ export default class TaxonomiesImportSetup {
       .then((data: any) => {
         terms = terms.concat(data.items);
         if (data.count >= skip + queryParams.limit) {
-          return this.getAllTermsOfTaxonomy(taxonomy, skip + 100, terms);
+          return this.getAllTermsOfTaxonomy(taxonomy, locale, skip + 100, terms);
         }
       })
-      .catch((err: any) => this.handleTaxonomyErrorMsg(err));
+      .catch((err: any) => this.handleTaxonomyErrorMsg(err, taxonomy.uid, locale));
     return terms;
   }
 
@@ -144,12 +319,15 @@ export default class TaxonomiesImportSetup {
     return terms;
   }
 
-  handleTaxonomyErrorMsg(err: any) {
+  handleTaxonomyErrorMsg(err: any, taxonomyUid?: string, locale?: string) {
+    const context = locale ? ` for locale: ${locale}` : '';
+    const taxInfo = taxonomyUid ? ` (${taxonomyUid}${context})` : '';
+
     if (err?.errorMessage || err?.message) {
       const errorMsg = err?.errorMessage || err?.errors?.taxonomy || err?.errors?.term || err?.message;
-      log(this.config, errorMsg, 'error');
+      log(this.config, `${errorMsg}${taxInfo}`, 'error');
     } else {
-      log(this.config, 'Error fetching taxonomy data!', 'error');
+      log(this.config, `Error fetching taxonomy data${taxInfo}!`, 'error');
       log(this.config, err, 'error');
     }
   }
diff --git a/packages/contentstack-import-setup/src/types/default-config.ts b/packages/contentstack-import-setup/src/types/default-config.ts
index 7a4d4e345f..364f929334 100644
--- a/packages/contentstack-import-setup/src/types/default-config.ts
+++ b/packages/contentstack-import-setup/src/types/default-config.ts
@@ -14,6 +14,11 @@ export default interface DefaultConfig {
       fileName: string;
       dependencies?: Modules[];
     };
+    locales: {
+      dirName: string;
+      fileName: string;
+      dependencies?: Modules[];
+    };
     extensions: {
       dirName: string;
       fileName: string;
diff --git a/packages/contentstack-import-setup/src/types/index.ts b/packages/contentstack-import-setup/src/types/index.ts
index 6c33397f9b..844e765f5a 100644
--- a/packages/contentstack-import-setup/src/types/index.ts
+++ b/packages/contentstack-import-setup/src/types/index.ts
@@ -150,4 +150,5 @@ export type TaxonomyQueryParams = {
   limit: number;
   skip: number;
   depth?: number;
+  locale?: string;
 };
diff --git a/packages/contentstack/package.json b/packages/contentstack/package.json
index 2c592b86a6..1866983ad9 100755
--- a/packages/contentstack/package.json
+++ b/packages/contentstack/package.json
@@ -31,7 +31,7 @@
     "@contentstack/cli-cm-export": "~2.0.0-beta.2",
     "@contentstack/cli-cm-export-to-csv": "~1.10.0",
     "@contentstack/cli-cm-import": "~2.0.0-beta.2",
-    "@contentstack/cli-cm-import-setup": "1.6.1",
+    "@contentstack/cli-cm-import-setup": "1.7.0",
     "@contentstack/cli-cm-migrate-rte": "~1.6.2",
     "@contentstack/cli-cm-seed": "~2.0.0-beta.2",
     "@contentstack/cli-command": "~1.6.2",