India’s Rice Export Boom and the Groundwater Crisis Beneath It

When India overtook China this year to become the world’s largest producer of rice, the milestone was framed as a triumph of farmer resilience and state-backed food security. Exports have surged past 20 million metric tonnes, cementing India’s position as the single most important player in the global rice market. Yet beneath this success story lies a growing unease in the country’s agricultural heartland: the rice boom is being fuelled by rapidly depleting groundwater, mounting farmer debt, and a subsidy regime that rewards unsustainable choices.

A record harvest with hidden costs

Rice cultivation has expanded steadily over the past decade, supported by assured procurement and export demand. India now accounts for about 40% of global rice exports, giving it disproportionate influence over international food prices and food security in import-dependent countries.

But this scale has come at a steep environmental cost. Rice is one of the most water-intensive crops, and its dominance in northern India has placed extraordinary pressure on groundwater reserves — particularly in Punjab and Haryana, the country’s rice basket.

Deeper borewells, higher debt

In large parts of Punjab and Haryana, farmers say groundwater that was accessible at around 30 feet a decade ago now lies anywhere between 80 and 200 feet below the surface. Government groundwater assessments and research by “Punjab Agricultural University” corroborate these claims.

Each additional drilling cycle raises costs sharply, forcing farmers to borrow more to install deeper borewells and more powerful pumps. Even in years of good monsoon rainfall, extraction continues unabated, preventing aquifers from recovering. As a result, large tracts of both States are officially classified as “over-exploited” or “critical” in terms of groundwater availability.

How subsidies lock farmers into rice

At the core of the problem lies India’s subsidy architecture. Rice cultivation is propped up by a guaranteed Minimum Support Price (MSP), which has risen by roughly 70% over the past decade, and by heavy power subsidies that make groundwater extraction artificially cheap.

As scholars such as “Uday Chandra” and “Avinash Kishore” point out, this creates a perverse incentive: one of the world’s most water-stressed countries is effectively paying farmers to grow a water-guzzling crop. Switching to alternatives such as millets or pulses, which need far less water, often means giving up income security.

The political scars of farm law reforms

Any attempt to change this equilibrium runs into political minefields. Prime Minister “Narendra Modi”’s attempt to reform agricultural marketing laws — aimed partly at encouraging private procurement and diversification — triggered massive farmer protests and was eventually rolled back.

The episode underscored how deeply MSP-backed rice procurement is intertwined with farmer livelihoods and political stability, especially in Punjab and Haryana. Since then, governments have been cautious, preferring incremental incentives over structural reform.

Global stakes, domestic dilemmas

India produces far more rice than it needs for domestic consumption, even as its population — now the world’s largest — continues to grow. The question, as analysts note, is not whether India can grow and export rice, but whether it should do so at current levels.

Because of India’s outsized role in global rice trade, even modest changes in its production or export policies ripple across international markets. This makes reform both more urgent and more complex, as domestic sustainability concerns intersect with global food security.

Are policy shifts beginning?

There are tentative signs of change. Haryana has introduced a subsidy of ₹17,500 per hectare to encourage farmers to switch from rice to less water-intensive crops such as millets. However, the incentive applies for only one growing season and has failed to generate large-scale adoption.

Experts argue that short-term payments cannot offset long-term risk. Research cited by agricultural economist “Ashok Gulati” suggests that a multi-year transition package — lasting at least five years — is necessary to give farmers confidence to move away from rice. Gulati also notes that such a shift need not increase overall subsidy spending: Punjab already spends close to ₹39,000 per hectare on fertiliser and power subsidies for rice, and redirecting most of this support toward alternative crops could maintain farmer incomes while saving water.

The larger question India must confront

India’s rice export dominance showcases its agricultural capacity and global relevance. But it also exposes a structural contradiction: food security policies designed for an era of scarcity are now driving ecological stress in an era of abundance.

The challenge ahead is not merely technical but political — redesigning incentives so that farmers are rewarded for conserving water, not exhausting it. Without such a shift, the cost of India’s rice success may be borne not just by its aquifers and farmers, but by the long-term sustainability of its food system itself.