Water has traditionally been acknowledged as a fundamental element crucial for survival. Given the present scenario of climate change, which is altering global rainfall patterns, it becomes even more crucial to appreciate the significance of water. The notion of virtual water gained prominence in the late twentieth century, emerging as a significant concept in the realms of water governance and global trade flows. Subsequent years witnessed notable advancements in this field, with numerous researchers quantifying the virtual water or embedded water within agricultural commodities traded among nations. At the core of this idea is the principle that countries facing water deficits should import commodities with high water requirements from nations abundant in water resources. The current study seeks to comprehend the dynamics of the global water economy and the evolution of this concept over time. Additionally, it aims to explore the concept of water footprint and assess India’s position in virtual water trade. The study also delves into the limitations of this concept.