Rice exports: India exported about 21.5 million tonnes of rice in 2025-26, earning nearly $11.5 billion. That is good news for farmers, exporters and the balance of payments. India has also regained its commanding position in the world rice market after the export restrictions of 2022-24 were withdrawn. But there is a debit entry missing from this impressive trade account. Rice consumes a great deal of water, and much of India’s export crop comes from regions where groundwater is already being pumped faster than it can be replenished.
This sits awkwardly with India’s claim to be a Vishwa Bandhu, a dependable friend to countries facing food shortages and supply disruptions. Food exports and humanitarian assistance are different things, but both help establish India as a reliable supplier. The trouble begins at home. If part of that reputation is sustained by rice grown with depleted aquifers in Punjab and Haryana, India is earning foreign exchange while running down a resource that is far harder to replace.
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The useful concept here is “virtual water”, the water embedded in the production of a traded commodity. It does not mean that every litre used to grow an exported crop disappears permanently from India’s water system. Rainwater, irrigation water and groundwater have different hydrological consequences. Virtual-water accounting matters because conventional trade statistics record the value of the crop while ignoring the resource stress created where it was produced.
That omission is especially serious in India. The country has around 18% of the world’s population and about 4% of its renewable water resources. Agriculture accounts for the overwhelming share of groundwater extraction. Studies of India’s agricultural trade have repeatedly identified rice as one of the largest carriers of virtual water abroad.
Where rice exports meet groundwater stress
Rice is thirsty, although sweeping claims about thousands of litres per kilogram need qualification. Water use varies greatly with climate, soil, irrigation and cultivation method. An ICAR study found that conventional puddled rice required about 2,801 litres of water for a kilogram of grain, compared with 1,571 litres under a modified system of rice intensification. The point is less the existence of one universal number than the enormous difference that production methods and geography can make.
Sugar poses a similar problem. A NITI Aayog task force estimated that producing one kilogram of sugar requires roughly 1,500-2,000 kilograms of water and recommended shifting some sugarcane acreage in water-stressed regions to less water-intensive crops. This is an important admission. India’s agricultural policy has long treated output, farm income and food security as the main variables. Water availability has too often entered the calculation after the crop has been planted.
The regional numbers show why this approach has run out of room. The Central Ground Water Board’s 2025 assessment puts Punjab’s stage of groundwater extraction at 156.36% of its annual extractable resource. Haryana stands at 136.75%. In Punjab, 111 of 153 assessed blocks are classified as over-exploited. These are no longer marginal warning signs. Extraction is running far ahead of annual replenishment.
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Basmati production is concentrated in a designated geographical belt that includes Punjab and Haryana, along with parts of western Uttar Pradesh, Uttarakhand, Himachal Pradesh, Delhi and Jammu and Kashmir. That makes the provenance of exports relevant. A tonne of rice grown largely with rainfall in a relatively water-secure district and a tonne produced by pumping an overdrawn aquifer cannot sensibly carry the same environmental valuation. Trade statistics treat them as equivalent. Water policy should not.
Farmers are responding to the incentives before them. Assured markets, established procurement systems, irrigation infrastructure and subsidised power have made paddy commercially rational even where it makes poor hydrological sense. Blaming cultivators for responding to those signals avoids the policy failure that created them.
Governments have begun to acknowledge the mismatch. Haryana’s Mera Pani Meri Virasat programme offers farmers incentives to move from paddy to maize, pulses, oilseeds and other alternatives. Its proposed Water Secure Haryana programme for 2026-32 combines crop diversification with water conservation and land reclamation. ICAR has also identified rice and sugarcane acreage in districts where rainfall makes their cultivation particularly water-intensive. These efforts point in the right direction, but they remain peripheral to the larger architecture of agricultural incentives.
Export earnings do not settle the argument
The case for agricultural exports deserves to be taken seriously. Rice exports alone earned India close to $11.5 billion in 2025-26. Overseas markets support farm prices, generate foreign exchange and strengthen India’s position in global food markets. When India returned strongly to the rice market after lifting restrictions, greater supply also helped bring international prices down. That mattered to poorer importing countries.
The mistake is to assume that export receipts provide a complete measure of economic value.
Groundwater depletion is an externality. Its cost does not normally appear in the price paid by an overseas rice buyer or in the income received by an exporter. It emerges later through deeper wells, higher pumping costs, declining water security and public expenditure on conservation and alternative supplies. That does not prove that rice exports are economically loss-making. It shows that the present accounting is incomplete.
There is another reason for caution. Estimates of India’s overall virtual-water trade balance vary according to the commodities and periods studied. One peer-reviewed study of food products found that India shifted from being a net virtual-water exporter to a net importer after 2013, while other crop-focused work finds a favourable virtual-water trade balance and identifies rice as a major component of exports. A single national number can therefore obscure more than it reveals.
The policy question is more specific: is India encouraging water-intensive production in places where additional extraction imposes a high ecological cost?
That distinction also argues against using repeated export bans as water policy. Sudden trade restrictions hurt farmers, unsettle exporters and make India a less predictable supplier. The sharp recovery in rice shipments after earlier curbs were lifted shows how strongly trade responds to such interventions. Groundwater conservation requires changes in agricultural incentives rather than occasional closure of the export gate.
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Put water into agricultural economics
India first needs better accounting. Agricultural export data should be accompanied by estimates of the blue-water footprint of major crops, with production traced to districts or river basins wherever feasible. A national average is of limited use when groundwater conditions differ so widely across states.
Farm policy then has to respond to that information. Procurement and income support should make pulses, oilseeds, millets and other suitable crops commercially credible alternatives in severely stressed regions. Diversification cannot survive on exhortation. Farmers who are asked to abandon a profitable paddy cycle need reliable markets and a reasonable expectation of income.
Rice itself can also use much less water. ICAR has reported water savings of 22-35% from modified systems of rice intensification, while alternate wetting and drying can substantially reduce irrigation requirements. Direct-seeded rice and shorter-duration varieties offer further possibilities where local conditions permit. Public incentives should reward verified reductions in water use rather than merely additional output.
Trade policy can reinforce this shift without resorting to crude export taxes. Sustainability standards, traceability and water-risk disclosure could gradually distinguish crops produced in severely stressed districts from those grown under more appropriate conditions. Export promotion agencies already devote considerable effort to quality, certification and market access. Resource efficiency should become part of that machinery.
India’s ambition to remain a major food supplier need not conflict with water security. It does, however, require abandoning the fiction that the location and method of production are irrelevant once a crop reaches the port.
A tonne of rice produced from an overdrawn Punjab aquifer and a tonne grown under water-efficient conditions elsewhere should not look identical to public policy. As long as they do, India will continue rewarding agricultural output while sending the water bill somewhere else.
Hridbina Chatterjee is a policy analyst, author, and researcher with research experience in South Asian geopolitics, maritime security, diplomacy, and climate governance.