India faces severe water stress, with per capita availability projected to fall to about 1,350 cubic meters by 2031, well below the 1,700 cubic meters threshold[1]. Approximately 600 million people endure high to extreme water stress with 200,000 annual deaths attributed to inadequate clean water access. Compounded by population growth, urbanization, and climate change, these challenges are expected to worsen, with rising temperatures potentially tripling groundwater loss between 2041 and 2080, threatening the nation's food and water security.
Agriculture, which consumes over 80% of India's freshwater reserves, is particularly affected. Water-dependent manufacturing sectors such as energy, textiles, chemicals, and paper are also severely impacted. Moreover, India's ambitious target to produce 5 million metric tonnes of green hydrogen annually by 2030 faces significant challenges due to the high-water consumption required for hydrogen production, estimated to be between 17.5 to 32 liters per kilogram.
As the global climate crisis inflicts increasingly irreversible damage, the importance of adaptation and resilience grows. Assessing the costs of inaction is critical for understanding the economic impacts and for fostering a resilient water sector in India through an integrated, nature-based approach to local water challenges.
Strategies to enhance water resilience are essential. The demand for water spans various sectors, making prudent resource management vital. The complexities of water-related challenges, which include both quality and quantity issues, make developing a consistent strategy for assessing risks particularly challenging. Additionally, water is often undervalued by Indian businesses, which overlooks the indirect effects of water stress on supply chains and operations. Effective water management strategies should be based on comprehensive risk assessments that consider environmental, social, and economic factors, including operational and basin-related risks, as well as the size and nature of company operations. The government plays a crucial role in pricing water to reflect its scarcity and risks, promoting technologies that improve water efficiency, and implementing innovative policies such as water budgets to ensure fair distribution and sustainable use.
Foster subnational innovations
Water is a state subject in India, often handled by various departments such as Department of Water Resources, Department of Urban Development, and the Minor Irrigation & Ground Water Development Department. There is a pressing need to develop an evidence-backed framework at the subnational level that unifies these departments around a central theme to enact cohesive and targeted water policies, such as adopting water trading mechanisms to promote the reuse of treated water.
Collaborate for water
Partnerships for water are essential; collaborations between governments and private operators can help manage sewage and deliver water to vulnerable communities. Community and partnership-based approaches are crucial for ensuring and preserving access to quality water, a persistent challenge in India despite significant government investments in rural water supply. Educating citizens on water conservation and their role in sustaining this vital resource, along with community-based water resource planning and management, can significantly bridge this gap. These efforts should elevate water issues to a political priority, spurring governmental action and fostering a behavioral shift.
Integrate technology for evidence in water
Parched states in India struggle to manage scarce water resources due to inadequate and outdated data on usage, impact of climate change on future water availability and on water distribution assets. Water remains a top priority, and the generation of scientific evidence through technological advancements, including artificial intelligence, provides a huge opportunity. AI can monitor water quality, detect leaks, optimize usage, and predict climate-induced events, impacts on infrastructure, and costs of inaction, helping to develop effective water resilience strategies.
Scale investments in adaptation to boost water security
Investments in water services and resources enhance people's well-being and strengthen the resilience of ecosystems and economies, and development finance has a significant role to play in supporting investment in sustainable and resilient water infrastructure. That said, the scale of the financing gap is such that there is need for deployment of catalytic capital via philanthropies, as well as mobilization of private sector financing for improved water resilience.
Therefore, successfully addressing India's water crisis will hinge on several critical factors. Enhancing public-private partnerships will require clear regulatory frameworks that encourage private investment and innovation while ensuring public interests are safeguarded. The success of technology will hinge on sustained governmental and institutional support for R&D. This includes funding pilot projects and scaling proven solutions, such as advanced water recycling technologies and smart water management systems. Finally, fostering an ecosystem of collaboration among stakeholders—ranging from government bodies and local communities to international organizations—will be crucial. This collaborative approach should focus on sharing best practices, knowledge, and resources, ensuring that solutions are not only innovative but also culturally and contextually appropriate.
Authors: Tania Banerjee, Anirban Mukherjee, Maitreye Parashar
About the Authors:
The authors of this article are affiliated with Boston Consulting Group (BCG). BCG serves as a process partner for Season 3 of Sustainability 100+ Awards.
Disclaimer: All views expressed in the article are solely that of the authors.
Moneycontrol journalists were not involved in the creation of the article.
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