A method and system is provided for distributed optimal caching for information centric networking. The system and method disclosed herein enables each router/node in the network to make an independent decision to solve the optimization problem based upon a cost feedback from its neighbors. Content is received by a first router which determines if it should store the content in its cache based on a Characterizing Metrics (CM) value or send it to a neighbor router j, where the neighbor router j is selected based on a transaction cost determination. The node j on receiving the content shared with itself again performs similar computation to determine if the content should be stored in its cache. The method is performed iteratively for optimal distributed caching.