The research investigated the effect of Inclusive Leadership (IL) on Work Engagement (WE) in electronics manufacturing company, focusing on the mediating roles of Psychological Safety (PS) and Perceived Workplace Stress (PWS). Findings revealed that inclusive leadership has a strong positive effect on engagement, both directly and indirectly by reducing stress in the workplace. While inclusive leaders were effective in improving psychological safety, this factor did not significantly contribute to engagement in the studied environment, suggesting that stress reduction plays a more critical role than psychological openness in structured, high-pressure industries. The final model demonstrated high explanatory strength, showing that a large portion of engagement outcomes can be attributed to leadership behaviors and stress levels. These results reinforce the Conservation of Resources (COR) Theory, emphasizing that preserving employee energy through stress mitigation is key to sustaining motivation. The study offers practical insights for improving employee performance and well-being through leadership strategies that target workplace stress, contributing to global goals on decent work and mental health.