Non-ionic surfactant vesicular systems (niosomes) are structurally similar to lipid vesicles, differing only in the bilayer composition. Herein we report a unique method to generate reactive oxygen species (ROS) utilizing a FLIM-FRET technique involving niosome-trapped yellow emissive carbon dots (YCDs) and methylene blue (MB) in aqueous medium under neutral conditions. Niosomes are biologically important because of their good stability and extremely low toxicity. Fluorescent CDs, emitting in the higher wavelengths on visible light excitation, are of incredible importance in bio-imaging and optoelectronics. Hence, we prepared nitrogen-containing YCDs from a single precursor, o-phenylenediamine, and explained their detailed photophysics upon incorporation into the niosomal bilayer. The YCDs are polarity sensitive, and are rotationally restricted in niosomes, which increases their fluorescence quantum yield from 29% (in water) to 91%. These YCDs are tactically employed to develop a near infrared (NIR) FRET pair with methylene blue (MB), which is a very well-known type-I and type-II photosensitizer. This FRET pair, which emits in the NIR region, is found to be an ideal system to generate ROS by excitation in the lower visible wavelengths. Interestingly, the ROS production by MB from the dissolved oxygen is enhanced inside the niosomes. The donor and the acceptor moieties in this unique NIR-emitting FRET pair display an unprecedented 300 nm Stokes shift. The findings could be influential in bio-imaging in the NIR region evading cellular autofluorescence and the controllably generated ROS can be further applied as a potential photodynamic therapeutic agent.