Characterizing local to regional scale water cycles and water resources will be crucial for achieving the United Nations' water‐related Sustainable Developmental Goals. However, quantification and understanding of groundwater extraction across scales have been hampered by inadequate water usage reporting and limited information on irrigation practices. Here we analyze observations from ∼15,000 groundwater monitoring wells and the Gravity Recovery and Climate Experiment satellites together with irrigation, agricultural, and meteorological datasets to show how drought‐induced coupling between natural and anthropogenic groundwater storage variations has caused sustainability challenges in India, the world's biggest consumer of groundwater for irrigation. Notably, the mechanisms and consequences of such coupling differ significantly depending on aquifer types. In Andhra Pradesh's hard rock aquifer, groundwater declines have been limited, despite the nearly constant water scarcity that its farmers face. Moreover, its free farm power policy involves an annual irrigation energy consumption of 26 billion kWh that costs US$ 2.5 billion, possibly unparalleled compared to any other part of the world of similar size (0.27 million km2). In West Bengal's highly permeable alluvial aquifer, the water table is declining rapidly (15 cm/yr) due to a policy that encourages irrigation. Situated between these two states, Odisha's aquifer shows substantial resilience to drought, owing to the state's relatively natural landscape and forest restoration policy. The findings of this study provide new insights to understand the divergent aspects of groundwater irrigation in north versus south India, which can enable development of adaptation and mitigation strategies to avert the looming water crisis.