India is the largest groundwater user in the world, with an estimated usage of around 230 km3 per year. Agricultural demand for irrigation is already the single largest draw on India's water, yet estimates by the Ministry of Water Resources indicate that by the year 2050 irrigation needs will rise by 56%. From the climate change viewpoint, India's groundwater hotspots are concentrated in the seven states of Punjab, Rajasthan, Maharashtra, Karnataka, Gujarat, Andhra Pradesh, and Tamil Nadu. The state of Punjab, with only 1.57% of the total geographical area, is contributing 27–40% rice, 55–65% wheat and 18–25% cotton to the central pool since the last three decades. The dropping water levels in these regions are largely attributed to unsustainable consumption of groundwater for irrigation and other uses along with increased runoff and/or evapotranspiration, which climate change may further exacerbate. This paper presents an overview of current groundwater issues and examines the potential and negative effects of climate change on the groundwater resources in Punjab. Therefore, in this paper an attempt has been made to analyze the problem of declining groundwater resources and possible factors responsible for this and suggest suitable strategies for arresting over-exploitation and for sustainable agriculture in Punjab.