The aim of the present study was to develop an Aloe vera–based bioactive edible film for improved lipid oxidative and microbial stability of frozen dairy products. Fig enriched kulfi was used as a model system and developed using different levels of fig powder viz. 0% (control), 2% (T1), 3% (T2), and 4% (T3). Addition of fig powder significantly (p < 0.05) increased the antioxidant capacity (2-2-azinobis-3ethylbenthiazoline-6-sulphonic acid and 1, 1-diphenyl-2-picrylhydrazyl radical scavenging activity, total phenolic content), melting resistance (up to 16%), crude fibre content (up to 183%), and the hardness (N) of the product. Highest scores were observed for T2 products for all sensory attributes. The T2 products were packaged in an edible film containing 15% A. vera extract (AE (15%)) and stored at − 18 ± 1 °C. The samples were taken on 0, 45, 90, 135, and 180th day and evaluated for storage stability. The A. vera extract enhanced antioxidant capacity and antimicrobial properties of the film against E. coli. Products packaged in AE (15%) film showed significantly (p < 0.05) lower values for TBARS (mg malondialdehyde/kg), free fatty acids (FFA, % oleic acid), peroxide value (meq/kg), and microbial counts (total plate, psychrophilic and yeast/mould, log10 cfu/g) compared to control samples (without film) during storage. The mean values for TBARS, FFA, total plate, and yeast/mould count on 180th day for AE (15%) packaged/control samples were 0.618/1.00, 0.478/0.806, 4.09/5.95, and 1.64/2.39, respectively. The developed film significantly improved the storage stability of kulfi and can be used for improving the storage quality of frozen dairy products.