The future of South Asia’s major production system (rice–wheat rotation) is at stake due to continuously aggravating pressure on groundwater aquifers and other natural resources which will further intensify with climate change. Traditional practices, conventional tillage (CT) residue burning, and indiscriminate use of groundwater with flood irrigation are the major drivers of the non-sustainability of rice–wheat (RW) system in northwest (NW) India. For designing sustainable practices in intensive cereal systems, we conducted a study on bundled practices (zero tillage, residue mulch, precise irrigation, and mung bean integration) based on multi-indicator (system productivity, profitability, and efficiency of water, nitrogen, and energy) analysis in RW system. The study showed that bundling conservation agriculture (CA) practices with subsurface drip irrigation (SDI) saved ~70 and 45% (3-year mean) of irrigation water in rice and wheat, respectively, compared to farmers’ practice/CT practice (pooled data of Sc1 and Sc2; 1,035 and 318 mm ha−1). On a 3-year system basis, CA with SDI scenarios (mean of Sc5–Sc8) saved 35.4% irrigation water under RW systems compared to their respective CA with flood irrigation (FI) scenarios (mean of Sc3 and Sc4) during the investigation irrespective of residue management. CA with FI system increased the water productivity (WPi) and its use efficiency (WUE) by ~52 and 12.3% (3-year mean), whereas SDI improved by 221.2 and 39.2% compared to farmers practice (Sc1; 0.69 kg grain m−3 and 21.39 kg grain ha−1 cm−1), respectively. Based on the 3-year mean, CA with SDI (mean of Sc5–Sc8) recorded −2.5% rice yield, whereas wheat yield was +25% compared to farmers practice (Sc1; 5.44 and 3.79 Mg ha−1) and rice and wheat yield under CA with flood irrigation were increased by +7 and + 11%, compared to their respective CT practices. Mung bean integration in Sc7 and Sc8 contributed to ~26% in crop productivity and profitability compared to farmers’ practice (Sc1) as SDI facilitated advancing the sowing time by 1 week. On a system basis, CA with SDI improved energy use efficiency (EUE) by ~70% and partial factor productivity of N by 18.4% compared to CT practices. In the RW system of NW India, CA with SDI for precise water and N management proved to be a profitable solution to address the problems of groundwater, residue burning, sustainable intensification, and input (water and energy) use with the potential for replication in large areas in NW India.