Streo Cartosat-1 satellite data was processed to generate high spatial resolution digital elevation model (DEM) using ground control points (GCPs) collected through geodetic single frequency GPS in differential GPS mode. DEM was processed to generate bare earth DEM by removing heights of natural and man made features from DEM. The bare earth DEM was further analysed in GIS environment to generate terrain-topographic indices viz. wetness index (WI), stream power index (SPI) and sediment transport index (STI) to characterize topographic potential of soil erosion. Hillslopes in the studied watershed (part of Shiwalik hills of Dehradun district, Uttarakhand state) were characterized as low wetness index values indicating dry areas whereas high wetness index values at lower reaches of the watershed indicating as possible source areas for generation of saturated overland flow.