India’s export economy has learned to worry about carbon. It has scrambled to decode Europe’s rules on deforestation, pesticides, traceability, and sustainability reporting. But as governments and companies fixate on carbon footprints, a deeper, quieter threat has begun to shape global trade norms, and that resource is groundwater.
The world’s largest consumer markets are tightening rules on how water is extracted, how much of it is used, and what pollutants flow into it. Europe, through the Green Deal’s zero-pollution agenda, is already nudging this shift. In the coming years, groundwater will become a determinant of market access. And among major exporting nations, India may be the most exposed.
India’s looming crisis under the soil
India extracts more groundwater than any other country, more than China and the United States combined. According to the Central Ground Water Board, nearly 68% of India’s irrigation depends on groundwater. More than 1,100 blocks across the country are classified as over-exploited, meaning extraction far exceeds recharge. In Punjab and Haryana, the economic engine of India’s agricultural exports, water tables are falling by 0.5 to 1 metre every year, and in some pockets, far more.
At the same time, nitrate pollution from fertilisers and pesticide run-off has turned large belts of northern and western India into contamination hotspots. Punjab’s Malwa region, now a case study cited in health research, shows nitrate levels far above safe limits in several districts, along with traces of persistent pesticides in groundwater.
Therefore, the constant depletion and contamination of the underwater reservoirs will soon develop into a major environmental crisis. And then, foreign buyers will shirk India and move to foreign shores.
How does Indian groundwater level against European Green Deal
As of now, Europe does not have a specific water law that applies to imports. However, when carefully examined, groundwater protection is a key pillar of the Green Deal.
The Water Framework Directive requires EU members to maintain “good chemical and ecological status” of groundwater. Under the Green Deal’s zero-pollution ambition, enforcement of this directive has tightened, with updated pollution thresholds, stricter monitoring, and greater transparency obligations. The Nitrates Directive, reinforced by the Farm-to-Fork strategy, aims to cut nutrient pollution by 50% by 2030 and reduce fertiliser use by 20%. These targets indirectly affect suppliers outside Europe because retailers increasingly trace nitrate footprints in imported crops.
The Sustainable Use of Pesticides framework links pesticide runoff to groundwater quality. Stricter limits on pesticide residues have already influenced EU procurement in commodities such as rice, tea, spices, and tobacco.
While none of these rules explicitly target foreign exporters today, they shape purchasing decisions, certification standards, and the overall regulatory climate. Trade experts in Brussels increasingly argue that water and pollution metrics should be integrated into the Digital Product Passport, which already covers industries such as textiles, electronics, batteries and will soon cover agri-food.
In other words, the good news is that Europe is not yet policing the water that foreign nations use to produce the goods it imports. But the bad news is that they are building a system where it will soon.
Indian exporters are exposed
It is important to note that most of the crops that are grown in the Indian subcontinent are deeply water-intensive. For example, basmati rice requires between 4,000–5,000 litres of water per kilogram. Cotton requires anywhere from 7,000–10,000 litres per kilogram, depending on the region. Sugarcane, which covers just 4% of India’s farmland, consumes nearly 70% of irrigation water in some states. And then, even shade-grown coffee and tea rely heavily on supplemental irrigation in years of erratic rainfall.
Europe remains one of the top buyers for all these commodities. As EU retailers begin ranking suppliers on water footprint, efficiency, contamination risk, and irrigation practices, Indian exporters may fall into lower tiers because of where and how these crops are grown.
Several European procurement teams are already requesting farm-level irrigation data, asking for water quality tests, prioritising suppliers with water stewardship certifications, and reducing purchases from regions with documented over-extraction.
India does not measure its groundwater usage
Unlike carbon reporting, which is slowly expanding across industries, India has almost no farm-level systems to record or verify water use. Drip and sprinkler irrigation are installed on only approximately 7.6% of India’s irrigated land, far below China or Israel. India lacks a national framework for water footprint disclosure for exports. And to add to these issues, the groundwater quality monitoring remains patchy, with vast gaps in pesticide and nitrate testing at the village level.
Exporters cannot provide water-use data because that data is not being generated. And without traceable records, India risks becoming a high-risk source in water sustainability audits.
However, all is not lost yet. There are credible pathways to protect both agriculture and exports. These include:
- accelerating micro-irrigation adoption,
- incentivising states to shift from groundwater-dependent cropping patterns,
- investing in real-time groundwater monitoring,
- adopting global or local certifications such as SPRING and Water+ for large export clusters,
- establishing national guidelines for water-footprint mapping and reporting.
The transition is expensive, which means the cost cannot fall on farmers alone. Exporters, commodity boards, and state governments must share responsibility.
The timeline keeps shrinking
Groundwater depletion is accelerating faster every year, and India’s major agricultural belts may face severe scarcity within a decade. However, in global trade, the timeline is even shorter: sustainability-linked procurement is already shifting, and buyers are using water metrics informally even before formal rules take shape. Can India make the change before the taps of its prized industries start running dry?
