Drought is the most destructive phenomenon that distresses the terrestrial carbon cycle balance and crop production. The variation in evapotranspiration (ET) and gross primary productivity (GPP) is a significant cause of agricultural drought effects on water use efficiency. This study aims to evaluate the impact of agricultural drought on WUE and it's anomalies in different climate regions. The standard vegetation index was used to measure the extent of agricultural drought. WUE was calculated using the ratio of ET, GPP, and climate classification using the De Martonne method. This study was conducted over the last 22 years, from 2001 to 2022. Meanwhile, 2001, 2002, 2014, and 2018 were considered high drought years based on a 22‐year analysis. According to remote sensing analysis of ET and GPP, the WUE increased throughout drought in all climate regions and more strongly in the arid zone than in humid regions. Humid areas were more vital due to drought than arid ones. WUE anomalies badge with increased drought severity across all climates except the very humid zone. Humid climates saw faster recovery times than arid ones, and areas experienced severe droughts. The findings of this research are essential for understanding the carbon and water cycles for agriculture management. The analysis of drought severity and WUE across arid climate regions helped analyse the varying impact of drought on WUE due to climate change. The significance of this study includes informing agricultural, water resource, and drought management planning in the Punjab Province, an agricultural region vulnerable to climate change. This study holds important learnings for agricultural regions worldwide. It has practical and scientific importance regarding agricultural systems' specific stresses and responses to droughts.