<p>Water is a resource that is very essential to sustain life, maintain harmonious ecosystems, and achieve economic development, yet is becoming increasingly limited. Although water covers about 70% of the Earth’s surface, only approximately 3% is freshwater and less than 1% is easily accessible for human usage, as most is locked up in polar ice caps and glaciers. Over-exploitation and pollution of freshwater due to fast industrialization, urbanization, and agricultural intensification aggravate scarcity and directly threaten environmental sustainability and public health. Earlier studies on India’s water crisis have mainly focused on issues of freshwater supply, often overlooking the added challenges of deteriorating water quality and their wider social and economic consequences. This research conducts a comprehensive qualitative examination of India’s water footprint, considering both the volume and quality of water to evaluate the potential risks associated with localized water scarcity. It further examines the role of virtual water flows, water inherent in goods and services, and their distribution across urban regions and economic domains. The findings indicate that, even in regions possessing an adequate supply of freshwater, diminished water quality significantly exacerbates scarcity. The study underscores the essential importance of integrating water quality into national and regional evaluations of water scarcity and provides policymakers with strategic recommendations for fostering frameworks of water utilization that are robust, equitable, and sustainable amidst increasing demand and climate variability.</p> Graphical abstract <p></p>