India’s water supply and usedwater treatment sector is undergoing a significant transformation, evolving in response to rapidly changing climate conditions and increasing urbanisation, both major contributors to growing water scarcity. This transformation is being propelled by progressive government initiatives, technological advancements, innovative treatment methods and a focus on water circularity, underscoring the urgent need for sustainable solutions. In line with these efforts, the government is promoting a unified “One Water” approach, which integrates water supply, sanitation, wastewater management and reuse to enhance service efficiency and resilience.
The Union Budget 2025-26 reflects this momentum, with significant allocations of Rs 967.77 billion to the Ministry of Housing and Urban Affairs (MoHUA) and Rs 995.03 billion to the Ministry of Jal Shakti, representing significant increases of 52 per cent and 93 per cent, respectively, over the revised estimates of 2024-25. This increased outlay aims to strengthen infrastructure, expand access and promote integrated water management. Moreover, the launch of initiatives such as the Urban Challenge Fund, with a corpus of Rs 1 trillion, reinforces the intent to position water and sanitation at the core of urban redevelopment. This policy and financial impetus is further supported by digital innovations, sustainable initiatives, increased private sector participation and growing collaboration with global stakeholders.
Government focus on integrated water management
The sector is witnessing significant activity, driven by increased government focus and budgetary allocations. This shift is being operationalised through flagship schemes such as the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Jal Jeevan Mission (JJM) and the urban and rural components of the Swachh Bharat Mission (SBM). These programmes support major water infrastructure upgrades through robust investments.
The Union Budget 2025-26 has allocated Rs 670 billion to JJM, Rs 100 billion to AMRUT and Rs 50 billion to SBM-Urban. To ensure effective outreach of JJM to all rural areas, the programme has been extended until 2028 under the budget. The focus is now on the quality of infrastructure and proper operation and maintenance of rural piped water supply schemes through “Jan Bhagidhari”.
This budgetary commitment is also translating into tangible infrastructure improvements. Under AMRUT 1.0, a sewage treatment capacity of over 4,400 million litres per day (mld) has been developed, with over 1,400 mld earmarked for recycle/reuse. AMRUT 2.0 is set to further scale this with over 6,700 mld of approved sewage treatment capacity and around 2,000 mld of it for recycle/reuse, demonstrating a strong focus on a circular water economy. This objective of the AMRUT scheme to make treated used water more useful has been carried forward by the newly launched initiative of Jal Hi Amrit (JHA). It incentivises states to reuse treated wastewater, with 880 sewage treatment plants (STPs) already enrolled under it. These developments are further supplemented by decentralised efforts at the state level, such as Delhi’s creation of a water resource recovery cell to monitor urban STPs under JHA.
Furthermore, the state governments are introducing comprehensive policies to regulate the appropriate use of water and its treatment. For instance, the Policy Note 2025-26 for the draft Tamil Nadu State Water Policy emphasises water governance, economic productivity and efficient use of water resources. Similarly, the Uttar Pradesh government is developing a policy for the reuse of treated wastewater under the State Mission for Clean Ganga. This draft focuses on the potential use of treated used water in agriculture, industry and groundwater recharge, among others.
Additionally, international collaborations, such as the recent MoUs signed between India and Nepal and between the Public Health Engineering Department of Rajasthan and South Australia on WASH sector cooperation reflect the government’s intent to integrate global best practices into local water management.
Promoting direct high-quality tap water access
Most Indian cities continue to grapple with outdated and deteriorating water supply infrastructure, characterised by leaking pipelines and substantial water losses. This has led to high levels of non-revenue water, making it difficult for utilities to measure usage and generate adequate revenue. In response, the state governments, urban local bodies (ULBs) and water utilities are advancing efforts to deliver high-grade, drink-from-tap (DfT) water to residents. This not only reduces reliance on bottled water but also curbs plastic waste, supporting broader environmental goals. Central to this progress are national milestones being set under JJM, with a coverage of nearly 81 per cent of rural households with tap water connections as of May 2025.
Among the most notable efforts is Odisha’s pioneering DfT mission, which ensures 24×7 access to potable water in urban areas. Cities such as Puri and Gopalpur have already achieved 100 per cent household coverage, with the programme being scaled to all 115 ULBs in the state. Puri has also become the first Indian city to offer DfT services, eliminating the need for boiling or filtration. The mission’s community-led Jalasathi programme is also fostering grassroots participation and strengthening public trust in direct tap access. Reinforcing this momentum, MoHUA agreed in May 2025 to consider a proposal for Goa’s DfT scheme under AMRUT 2.0. The Rs 6.5 billion project includes water source augmentation, infrastructure rehabilitation, smart metering, and internet of things (IoT)-and supervisory control and data acquisition (SCADA)-based monitoring systems.
Digital advancements
There is a growing focus on the integration of digital and technological innovations in the sector, aimed at enhancing operational efficiency, transparency and long-term sustainability. AMRUT and JJM, supported by international agencies such as the Asian Development Bank, World Bank and Japan International Cooperation Agency (JICA), are accelerating this transformation. AMRUT 2.0, in particular, has embedded digital governance and data-driven planning into its framework through initiatives such as smart water management, geographic information system (GIS)-based master planning and a dedicated technology sub-mission. Over 500 technologies are currently being incubated under AMRUT’s start-up challenge, reflecting the push for innovation-driven solutions across the water value chain. Besides, its AMRUT 2.0 Collaboration Platform exemplifies the shift toward paperless and transparent governance, enabling seamless project tracking and performance updates.
Technologies such as SCADA systems, IoT sensors and GIS are increasingly being utilised for leak detection and geo-tagging of assets to enable real-time monitoring and improve project implementation. Notable examples include the deployment of SCADA in over 250 water supply schemes under the DfT initiatives and the recent launch of Delhi’s advanced recycler machine, which automates sewer cleaning and wastewater reuse without manual intervention.
On the smart analytics front, artificial intelligence is being explored for optimising chemical dosing, reducing energy consumption and enhancing leak detection and SCADA security. Osmania University’s IoT-based sewage monitoring system in Hyderabad also showcases the role of academia in tech development. It allows real-time cloud-based tracking of sewer conditions. Meanwhile, the Hyderabad Metropolitan Water Supply and Sewerage Board has implemented GIS for asset mapping and introduced smart valve technologies to reduce wastage and overflows. At the policy level, the Ministry of Jal Shakti’s Bhu-Neer portal, launched in November 2024, centralises groundwater permit management and offers a transparent, digital interface for sustainable groundwater regulation.
Advanced industrial used water treatment gains uptake
There is a growing emphasis on the adoption of mature industrial used water treatment methods, reflecting a broader shift toward sustainable industrial practices and environmental compliance. Tertiary treatment technologies, particularly those involving reverse osmosis and disinfection, are gaining traction for their ability to enable high-quality water recovery and reuse. A notable example is Tamil Nadu’s approval of a Rs 2.45 billion tertiary treatment reverse osmosis plant at the Ukkadam STP in Coimbatore in May 2025, aimed at treating 25 mld of wastewater through ultra-filtration and disinfection processes.
Meanwhile, academic and research institutions are contributing to the innovation landscape by developing low-cost and eco-friendly treatment methods. For instance, IIT Guwahati has pioneered the use of fruit waste-derived biochar for removing toxic compounds such as 4-nitrophenol from industrial effluents with up to 99 per cent efficiency. Similarly, Shivaji University’s research on jamun leaf-based biochar offers a biodegradable, chemical-free solution for treating colored pollutants in industrial discharges. The National Institute of Technology Rourkela has also developed a patented process that has demonstrated over 95 per cent decolourisation and a significant reduction in chemical oxygen demand using an environmentally benign system, supported by the Ministry of Science and Technology. These advancements collectively represent a dual-track approach involving policy-led infrastructural development and grassroots innovations to elevate the standards of industrial used water treatment in India.
Promotion of circular water usage and desalination
The sector is increasingly embracing a circular water economy model to address the pressing challenges of water scarcity and sustainability. The reuse of treated used water is now being prioritised in industries, construction, agriculture and even urban water systems. States such as Maharashtra, Gujarat and Tamil Nadu are enacting policies to incentivise this transition, while cities such as Navi Mumbai, Raipur and Chennai have rolled out operational projects. For instance, Navi Mumbai has commissioned three tertiary water treatment plants with a combined capacity of 45 mld to supply recycled water to construction sites, reducing reliance on potable water. Similarly, Raipur Municipal Corporation has signed agreements with industries such as Alok Ferro Alloys Limited to reuse 13 mld of treated wastewater, generating both resource savings and revenue. Goa is also promoting industrial reuse, particularly in the Cuncolim Industrial Estate, where treated used water from fish processing plants is being redirected to steel rolling mills, reducing groundwater stress.
In parallel, desalination is gaining momentum as a critical alternative water source, especially in coastal states. While the eastern coast is witnessing the development of several projects aimed at providing potable water to cities and reusable water to industries, the western coast has seen slower progress. The high-capacity 400 mld Perur desalination plant in Chennai holds significant importance to the eastern coastal belt. It has been pushed towards further progress with a recent loan agreement for Rs 30.65 billion between JICA and the Department of Economic Affairs, Ministry of Finance. Upcoming desalination plants in Tuticorin and Nagapattinam, in Tamil Nadu, and Dubrayapet, in Puducherry, further reinforce this trend. Similar initiatives on the western coast such as the Manori desalination plant in Maharashtra are slowly gaining momentum.
Decentralised, conservation-based and river rejuvenation initiatives
India is intensifying its efforts towards decentralised water management, recognising the need for localised and sustainable solutions. Decentralised wastewater treatment systems are gaining traction as viable alternatives in areas lacking centralised infrastructure. A major initiative in this direction is the Expenditure Finance Committee’s approval, in April 2025, of Rs 31.4 billion for the development of 27 decentralised STPs and associated sewer networks to clean the Yamuna River in Delhi. Along similar lines, significant momentum is building around dedicated river and lake rejuvenation projects, driven by government bodies and research institutions. The ten-point action plan outlined by TERI for the Yamuna in February 2025 is a comprehensive roadmap involving environmental flow assurance, treaty review and pollution control through better surveillance and improved STP performance. In addition, initiatives such as anti-foaming drives by the Delhi Jal Board at the Okhla barrage and Uttar Pradesh’s “Aviral Nirmal Gomti” mission highlight growing state-level engagement. Other city-level drives include Indore’s recently launched Jal Ganga Samvardhan Abhiyan, which focuses on groundwater recharge through well and pond rejuvenation. Rainwater harvesting continues to be a key pillar of water conservation, as seen in the sixth edition of the Jal Shakti Abhiyan: Catch the Rain, launched in March 2025. With its focus on 148 priority districts, the campaign underscores the critical role of community participation and inter-agency coordination in ensuring water security and revitalising freshwater ecosystems across India.
Challenges and the way forward
Despite notable advancements and policy efforts, India’s water sector continues to face persistent bottlenecks that must be addressed to ensure long-term sustainability. One of the most pressing issues is the limited public acceptance of treated used water, largely driven by misconceptions about its safety and quality. This resistance, particularly regarding its use in agriculture and potable applications, stems from a lack of awareness about rigorous treatment protocols. Meanwhile, dedicated pipeline networks for supplying treated used water are yet to be fully developed in many cities. Besides, operational inefficiencies in STPs and fecal sludge treatment plants further underscore the need for better plant design, skilled manpower and robust performance monitoring systems. With India’s water demand projected to double by 2040, creating a potential shortfall of 750 billion cubic metres as per industry estimates, urgent action is needed in the form of infrastructure investment, technological innovation and circular water solutions.
The way forward lies in strengthening digital ecosystems, reimagining workforce competencies and fostering integrated governance. Key steps include establishing a centralised data repository for water assets, adopting trenchless pipeline replacement technologies and promoting public-private partnerships (PPPs) to enhance operational efficiency. Equally crucial is the upskilling of the public health workforce, training civil and environmental engineers, improving financial and PPP literacy, and embedding community engagement into project design.
By learning from global best practices, India must transition to a more decentralised, data-driven and participatory model of water governance. Aligning policy with on-ground execution and fostering a culture of innovation and accountability will be critical in meeting rising demand and building a resilient and inclusive water future.
Shubhangi Goswami
