I think it would depend on the color you are going to use for the curtains and bedding. I think something very neutral on the walls such as a light brownish taupe would give you the most flexibility. I would take the wallpaper into a few paint stores and get some ideas from the people who work there. They can be very helpful.

You can work with your currant wall color or go more yellow - that is up to you. If you do decide to go more yellow. get some small inexpensive sample bottles at the paint store, paint some poster board and hang it on a wall for couple of days because getting the right buttery yellow can be hard. A soft yellow and lavender is pretty together but I also like the sea green. When you said a combo of modern and cottage - that made me think of beach cottages, which often have soft colors (including sea green) and unfussy, calm interiors. You can put a large painting up if you have the wall space for it. Many bedrooms have tall chest, dresser mirror, tall headboard and big TV, all which take up wall space. If you can hang the painting without it being crowded by any of the things I mentioned, it should look very nice. If you wish to do a curtain fabric treatment to a wall and you have the vision of what you want - then go for it. I had a friend who did that in collage - only problem was the yards and yards of fabric needed got rather expensive. So, I would start with finding bedding you love. Simple white is good, and not too expensive. However, you might find something else light that you love, or a quilt or throw for the bottom of the bed and the colors and shades might lead you in a different direction for wall color or accents. So bedding first, then curtains, then see how your wall color is and then add accents and art - although your painting can also be an inspiration for colors.

Thank you so much Hibaou, Patricia and Oasis. But I was thinking the ceiling should be tall for colouring the ceiling. Isn't it?Since the height of the ceiling is just 8.5 ft don't you guys think it will make the room smaller. Fyi..rest of the furniture in the bedroom is white - wardrobe, bed , side tables Plz help!

Keya, glad you decided to take the one reader's idea about moving the armoires in front of windows that you don't need and giving the bed a wall of its own! And, yes, you can have Roman shades on one wall and layered drapes on the other. When I had drapes made for my tall sitting room windows/doors, I had them use the same fabric for the Roman shades for the smaller windows on the other wall. For me personally, in these older Indian homes with all the odd nooks and niches in the walls, perhaps it would be more soothing to have a light/med tone paint on the walls that blends with the drapes/blinds for an 'uninterrupted' look, and I would use the same color on ceiling and beams. (but that is just my thought) I would start the process with a large carpet with your favorite colors, then choose your Bedcover & cushions, then your wall paint and fabric for drapes/blinds ..Not certain what style you like, but if you really like a particular Ethnic bedcover fabric, you can always have them stitched into curtains or Roman shades too. Can't wait to see the "After" pics!