Can Industries Extract Groundwater in an Over-Exploited Area?

Can Industries Extract Groundwater in an Over-Exploited Area?

The short answer is:

Sometimes—but not every industry, and not under every circumstance.

Under the current consolidated MoJS/CGWA groundwater guidelines, an Over-Exploited assessment unit is treated as a highly stressed groundwater area.

For industrial use, the central guideline states that NOC for groundwater abstraction shall not be granted to a new industry in an Over-Exploited assessment unit except eligible MSMEs. It also states that an existing industry's expansion involving an increase in groundwater abstraction is not permitted in such areas. New packaged-water industries are specifically excluded even if they fall within the MSME category.

That means the question:

“Can industry extract groundwater in an Over-Exploited area?”

cannot be answered with a simple universal yes or no.

The correct answer depends on:

• whether the industry is new or existing;

• whether it qualifies as an MSME;

• whether groundwater quantity is increasing;

• whether the abstraction is for process use or only domestic/greenbelt purposes;

• whether the project is a packaged-water industry;

• whether the area is under CGWA or State groundwater regulation;

• whether saline groundwater is involved; and

• whether current NOC conditions are being complied with.

For the broader context of groundwater classification, see:

Safe, Semi-Critical, Critical and Over-Exploited Groundwater Areas Explained

What Is an Over-Exploited Groundwater Area?

An assessment unit is classified as Over-Exploited when groundwater extraction exceeds the assessed annual extractable groundwater resource under the groundwater-resource assessment methodology.

This is not the same as saying:

“There is no groundwater left underground.”

Groundwater may still physically exist and borewells may still yield water.

The classification indicates that, at the assessment-unit level, the groundwater resource is under unsustainable abstraction pressure.

That is why the regulatory framework treats these areas differently from Safe, Semi-Critical and Critical units.

Can a New Industry Obtain Groundwater NOC in an Over-Exploited Area?

Under the current central guidelines:

Generally no—unless the new industry falls within the eligible MSME category.

The consolidated guidelines state that in Over-Exploited assessment units, NOC shall not be granted for groundwater abstraction to a new industry except those falling within the Micro, Small and Medium Enterprises category.

But even this should not be interpreted as:

“Every new MSME automatically receives permission.”

The application must still satisfy the applicable groundwater requirements.

The regulatory framework also says that industrial NOC is to be granted only where local government water-supply agencies are unable to provide the desired quantity.

Therefore, a new MSME should still evaluate:

• actual water requirement;

• government water-supply availability;

• water-efficient technology;

• wastewater reuse;

• rainwater harvesting;

• groundwater quality;

• project-specific documentation; and

• applicable State or CGWA conditions.

What About a Large New Industry?

For a large new industry proposing process groundwater abstraction in an Over-Exploited assessment unit, the central framework is substantially more restrictive.

The guidelines state that new major industries are not to be granted NOC in Over-Exploited assessment areas except as provided under the policy framework, and the industrial-use section narrows the exception essentially to eligible MSMEs.

For a large greenfield industrial project, this has an important commercial implication:

Groundwater should not be assumed to be the primary project water source merely because nearby borewells exist.

The project may need to be designed around:

• industrial water supply;

• municipal supply;

• treated sewage;

• surface water;

• process recycling;

• ETP/STP reuse;

• rainwater;

• high-recovery treatment;

• or another authorised source.

For such projects, groundwater becomes a site-selection and CAPEX issue, not just an NOC issue.

Can a New MSME Extract Groundwater in an Over-Exploited Area?

Potentially yes, subject to the applicable groundwater regulations and NOC conditions.

The consolidated guideline expressly provides an exception for new industries falling within the MSME category in Over-Exploited assessment units.

However, there are two important qualifications.

First, the project must actually qualify under the relevant MSME framework.

Second, the exemption does not eliminate the other groundwater conditions.

A project should still assess:

• desired quantity;

• availability of public/industrial water;

• rainwater-harvesting requirements;

• water efficiency;

• monitoring;

• groundwater quality;

• NOC validity and renewal;

• applicable charges.

This is why the phrase:

“MSME is allowed”

should not be converted into:

“MSME groundwater approval is automatic.”

Are Packaged Drinking Water Industries Allowed?

This is an explicit exception to the MSME exception.

The current guideline states that NOC shall not be granted to new packaged-water industries in Over-Exploited areas even if they belong to the MSME category.

This includes a category of business whose commercial product depends directly on groundwater extraction.

For a proposed packaged-water unit, checking groundwater classification before land purchase is therefore especially important.

What If the Groundwater Is Only for Drinking and Domestic Use?

The current guidelines distinguish process abstraction from limited groundwater requirements associated with workforce and greenbelt.

For new industries in Over-Exploited assessment units, the guideline permits NOC for drinking/domestic use for the workforce and greenbelt use, subject to applicable requirements.

This is important because an industrial project may have:

• process water supplied externally;

• treated water for utilities;

• but a smaller groundwater requirement for domestic use.

The water architecture should therefore separate:

process demand

from

domestic/greenbelt demand

rather than combine everything into one groundwater number.

Can an Existing Industry Continue Extracting Groundwater?

Potentially yes, subject to a valid NOC, renewal requirements and compliance conditions.

The current framework specifically recognises existing industries drawing groundwater in Over-Exploited assessment units and requires them to pay groundwater restoration charges under the applicable charging framework.

That means an existing industrial user is treated differently from a proposed new large industrial groundwater user.

However, the existing industry should not assume:

“Because our borewell already exists, our groundwater entitlement is unlimited.”

The factory should review:

• NOC validity;

• permitted abstraction;

• actual abstraction;

• registered borewells;

• digital flow-meter records;

• piezometer data where required;

• water audit requirements;

• rainwater-harvesting provisions;

• groundwater quality;

• wastewater reuse;

• NOC conditions.

Can an Existing Industry Increase Groundwater Withdrawal During Expansion?

Under the current central guideline, expansion of an existing industry involving an increase in groundwater abstraction in an Over-Exploited assessment unit is not permitted.

This is one of the most important issues for manufacturing companies.

Suppose a factory currently abstracts:

70 m³/day

and plans to double production.

Its projected water demand might rise to:

120 m³/day.

It should not automatically assume that it can simply increase groundwater withdrawal from 70 to 120 m³/day.

The correct engineering response is to investigate whether the expanded production can be supported while maintaining groundwater withdrawal at or below the existing permitted quantity.

That may require:

• cooling-water optimisation;

• condensate recovery;

• treated ETP reuse;

• STP reuse;

• improved process washing;

• RO recovery;

• alternative supply.

This is exactly where an Industrial Water Audit becomes strategically important.

Expansion Without Increased Groundwater Can Still Be Possible

This deserves emphasis.

A restriction on increasing groundwater abstraction does not necessarily mean production cannot increase.

Suppose:

Existing production: 100 tonnes/dayGroundwater: 100 KLD

Proposed expansion:

Production: 150 tonnes/day

Without optimisation, projected groundwater demand:

150 KLD

But after water-efficiency measures:

• cooling optimisation: -15 KLD

• condensate recovery: -10 KLD

• STP reuse: -10 KLD

• ETP reuse: -10 KLD

• process recycling: -5 KLD

The expanded plant may potentially continue operating near:

100 KLD fresh groundwater

despite 50% higher production.

The commercial question therefore becomes:

Can production increase without groundwater abstraction increasing?

That is often much more useful than simply asking whether “groundwater expansion” is permitted.

What Charges Apply to Existing Industries in Over-Exploited Areas?

The current central framework distinguishes groundwater abstraction charges in Safe/Semi-Critical/Critical areas from groundwater restoration charges in Over-Exploited assessment units.

Existing industries extracting groundwater in Over-Exploited assessment units are subject to restoration charges based on the applicable category and quantity.

The applicable rates and regulatory charges should always be verified at the time of application or renewal because they can be amended.

For project economics, water cost should therefore not be treated simply as:

pumping electricity + borewell maintenance.

The true groundwater cost can include:

• statutory charges;

• metering;

• monitoring;

• audits;

• recharge/RWH infrastructure;

• treatment;

• compliance.

How Often Does an NOC Need Renewal in an Over-Exploited Area?

The consolidated guideline provides a shorter renewal period for Over-Exploited areas.

The current framework indicates two-year renewal terms for users in Over-Exploited assessment areas, subject to compliance with NOC conditions.

A renewal application should not be treated as a clerical activity.

Before renewal, the industry should reconcile:

permitted abstraction

vs

actual abstraction

vs

plant water balance

vs

NOC conditions.

What If the Area Becomes Over-Exploited After the Original NOC?

The guidelines also address changes in assessment-unit category.

At renewal, if the groundwater category has changed, the renewal is granted subject to the conditions applicable to the new category.

This means an industry cannot safely assume:

“Our block was Safe when we started, so the old regulatory position will continue forever.”

Groundwater category should be rechecked before:

• renewal;

• expansion;

• new borewell planning;

• capacity addition;

• acquisition.

Is an Existing Borewell Automatically Legal Because It Has Been Operating for Years?

No.

Physical existence does not establish regulatory status.

A factory may have a borewell that:

• predates current regulations;

• was never registered;

• has an expired NOC;

• abstracts above permitted quantity;

• has no working flow meter;

• is not reflected correctly in site documentation.

The correct questions are:

1. Is the borewell registered where required?

2. Is there a current NOC?

3. What quantity is permitted?

4. What is actually being abstracted?

5. Are monitoring conditions complied with?

A borewell shown in another approval or drawing is not automatically a substitute for groundwater permission.

Does the Industry Need a Water Audit?

Under the consolidated guideline, industries abstracting groundwater above the specified 100 m³/day level are subject to water-audit requirements and are required to reduce groundwater dependence through appropriate measures.

This is not simply an environmental-reporting exercise.

A proper water audit should determine:

• groundwater abstraction;

• total freshwater input;

• process consumption;

• cooling use;

• boiler use;

• wastewater generation;

• ETP/STP reuse;

• condensate recovery;

• RO reject;

• unaccounted losses;

• specific water consumption.

The result should be a quantified water-reduction programme.

For methodology, see:

Industrial Water Audit Services

Is Groundwater Impact Assessment Required in an Over-Exploited Area?

For higher groundwater abstractions, yes.

The current CGWA framework requires impact-assessment documentation for applicable projects proposing groundwater extraction over 100 m³/day in Over-Exploited, Critical and Semi-Critical assessment units.

The study may evaluate:

• hydrogeology;

• aquifer characteristics;

• groundwater levels;

• surrounding wells;

• recharge;

• drawdown;

• cumulative groundwater stress;

• groundwater modelling;

• mitigation.

For a full explanation:

When Is Groundwater Impact Assessment Required for an Industrial Project?

and

How a Groundwater Impact Assessment Is Conducted

What About Piezometers and Groundwater Monitoring?

For qualifying industrial abstraction outside designated industrial areas, the current CGWA framework prescribes groundwater-level monitoring through observation wells/piezometers at applicable withdrawal thresholds.

This allows groundwater-level response to be tracked independently from the production borewell.

Useful monitoring connects:

groundwater abstraction

• 
  

groundwater level

• 
  

rainfall

• 
  

production

rather than treating each measurement separately.

Does Rainwater Harvesting Allow More Groundwater Extraction?

Not automatically.

The guidelines require industries to adopt rooftop rainwater harvesting/recharge measures, subject to project conditions. Potentially polluting industries may need harvested rainwater to be stored and used rather than recharged directly.

Rainwater harvesting contributes to groundwater management.

It should not be used as a simplistic equation:

20,000 m³ recharge = right to abstract another 20,000 m³.

Actual recharge depends on:

• geology;

• soil;

• groundwater depth;

• rainfall;

• infiltration;

• structure performance;

• losses.

Can an Industry Use Saline Groundwater in an Over-Exploited Area?

This is an interesting exception.

The consolidated guidelines encourage abstraction of saline groundwater from suitable saline aquifers or pockets, including in Over-Exploited areas, subject to applicable technical and environmental requirements. Such abstraction may receive different treatment under the charging framework.

But this should not be interpreted as permission to pump any groundwater simply because salinity exists somewhere in the area.

The project would need to establish:

• aquifer salinity;

• groundwater quality;

• well design;

• disposal/treatment strategy;

• regulatory compliance.

For some industries, saline water combined with suitable treatment may nevertheless provide an alternative source worth evaluating.

What About State Groundwater Authorities?

This is essential.

The CGWA framework does not mean that every industrial groundwater application in India is processed identically through CGWA.

Some States operate their own groundwater regulatory systems.

State provisions may include requirements that are:

• different;

• additional;

• or more stringent.

The consolidated guidelines themselves recognise State/UT groundwater authorities and local hydrogeological conditions.

Therefore, every industrial project should begin with:

Who is the competent groundwater authority at this site?

For example, as discussed in SARK's Uttar Pradesh groundwater guide, the State operates its own groundwater framework, including notified-area restrictions.

See:

Groundwater Classification in Uttar Pradesh

What Should a New Industry Do Before Buying Land in an Over-Exploited Area?

Do not begin by drilling a test borewell.

Begin with water due diligence.

The project should establish:

1. Exact Groundwater Classification

Check the latest official assessment unit.

2. Competent Authority

CGWA or applicable State groundwater authority.

3. Industry Status

MSME or non-MSME.

4. Proposed Water Demand

Process, cooling, boiler, domestic and utilities.

5. Alternative Water Sources

Industrial water, municipal supply, treated sewage, surface water and other authorised sources.

6. Wastewater Reuse

ETP/STP recovery potential.

7. Rainwater Potential

Storage or recharge depending on the site.

8. Future Expansion

Do not design only for Year 1 production.

For major groundwater-dependent projects, this should form part of Industrial Project Assessment.

What Should an Existing Industry Do?

For an operating plant in an Over-Exploited area, I would use the following sequence.

Step 1 — Verify the NOC

Review:

• validity;

• permitted quantity;

• borewells;

• conditions;

• renewal date.

Step 2 — Measure Actual Abstraction

Do not rely on pump capacity.

Use calibrated flow-meter data.

Step 3 — Prepare a Water Balance

Establish exactly where the water goes.

Step 4 — Benchmark Specific Water Consumption

For example:

m³ water / tonne product

This allows production growth to be separated from groundwater growth.

Step 5 — Identify Recovery

Evaluate:

• condensate;

• treated STP;

• treated ETP;

• cooling blowdown;

• process reuse;

• RO recovery.

Step 6 — Assess Expansion

Determine whether increased production can occur without increased groundwater withdrawal.

Step 7 — Prepare Renewal Early

Do not wait until the NOC is about to expire.

What Should an Industry Do If It Cannot Increase Groundwater?

This is where engineering matters most.

A groundwater restriction should trigger a redesign of the site's water architecture.

Potential solutions include:

Reduce Process Demand

Improve washing, housekeeping and process integration.

Optimise Cooling Towers

Increase appropriate cycles of concentration and reduce unnecessary blowdown.

Recover Condensate

Particularly valuable in steam-intensive industries.

Reuse Treated STP Water

For suitable non-potable applications.

Reuse ETP Water

Where treatment quality supports reuse.

Improve RO Recovery

Within sustainable technical limits.

Harvest Rainwater

For direct utilisation or recharge where appropriate.

Use External Reclaimed Water

Treated municipal sewage can be valuable for selected industrial duties.

Develop Alternative Authorised Supply

Municipal or industrial-water networks may reduce groundwater dependence.

For the complete methodology, read:

What Should an Industry Do If Groundwater Withdrawal Is Restricted?

New Industry vs Existing Industry in an Over-Exploited Area

This distinction is fundamental.

New Large Industry

Process groundwater abstraction is generally highly restricted under the CGWA framework.

New MSME

May be eligible subject to applicable NOC conditions.

New Packaged-Water Industry

Not eligible for the MSME exception under the central guideline.

Existing Industry

May continue authorised abstraction subject to NOC, renewal, compliance and restoration charges.

Existing Industry Planning Expansion

Increase in groundwater abstraction is not permitted under the central Over-Exploited-area rule.

That means existing production capacity and proposed production capacity must be connected to a water optimisation plan.

Groundwater Restriction Is Ultimately a Project-Design Issue

An Over-Exploited classification is not just an environmental label.

It can affect:

• industrial land value;

• project feasibility;

• utility design;

• CAPEX;

• production expansion;

• wastewater treatment;

• water storage;

• external water pipelines;

• operating cost.

A factory in a groundwater-constrained location may still be perfectly viable.

But its design may need to be based on:

low groundwater dependency

rather than:

borewell as the default water supply.

That distinction should be identified before project investment.

How SARK Engineers & Consultants Approaches Over-Exploited-Area Projects

SARK treats the issue as a combination of groundwater regulation + industrial water engineering + project feasibility.

Support can include:

Groundwater Regulatory Screening

Determine current category, authority and project eligibility.

Water Requirement Review

Verify actual process and utility demand.

Industrial Water Audit

Measure existing use and identify reduction opportunities.

Groundwater Impact Assessment

Where applicable, evaluate aquifer response and abstraction impact.

Wastewater Reuse

Assess ETP/STP treated-water reuse.

RWH and Recharge Assessment

Develop technically suitable rainwater management.

Alternative Water Strategy

Evaluate municipal, industrial, reclaimed-water and other authorised sources.

Expansion Water Planning

Determine whether production can increase without increasing groundwater withdrawal.

Explore the complete framework at:

Groundwater Regulatory Intelligence for Industries in India

Frequently Asked Questions

Can a new industry extract groundwater in an Over-Exploited area?

Under the current central guideline, NOC is generally not granted to new industries in Over-Exploited assessment units except eligible MSMEs.

Can a new MSME obtain groundwater permission in an Over-Exploited area?

The central framework provides an exception for eligible new MSMEs, subject to applicable NOC and project conditions.

Can a new packaged-water unit obtain groundwater NOC in an Over-Exploited area?

The current guideline specifically states that new packaged-water industries are not to receive NOC in Over-Exploited areas even if they fall within the MSME category.

Can an existing factory continue groundwater abstraction?

Potentially yes, subject to valid NOC, renewal conditions, permitted abstraction and applicable groundwater restoration charges.

Can an existing factory increase groundwater abstraction during expansion?

Under the central guideline, expansion involving increased groundwater abstraction in an Over-Exploited assessment unit is not permitted.

Can groundwater be used only for workers' drinking and domestic demand?

The central guideline permits groundwater NOC for workforce drinking/domestic and greenbelt requirements for new industries in Over-Exploited areas, subject to applicable conditions.

Is saline groundwater treated differently?

The framework encourages suitable saline-groundwater abstraction, including in Over-Exploited areas, subject to technical and environmental safeguards.

Should an industry check State rules separately?

Yes. The applicable regulator and State groundwater framework should always be verified because State requirements may differ or be more stringent.

Regulatory Note

Information reviewed: August 2026

This article reflects the consolidated MoJS groundwater-extraction guidelines incorporating the 2020 notification and subsequent amendment framework currently published by CGWA. Regulatory position should be checked against the latest CGWA/NOCAP or applicable State groundwater-authority requirements before investment, borewell construction, expansion or renewal.