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The water crisis is assuming serious proportions in the world. If we look at the present scenario of water availability in India we observe that India with its per capita availability of less than 1600 m3 of water is a water-stressed country. The rising demand is likely to push it further to water scarce category if drastic measures of conservation and its efficient use is not promoted and adopted. The availability of water in India also shows variation in distribution from one region to another. Out of the total water consumption in the world about 70 percent is consumed by the agricultural sector. In India about 80 percent of the water goes to agricultural sector. It can be said that wasteful irrigation practices like flood and furrow irrigation are major culprits causing wastage of water leading to its crisis which is worsening day by day. The technology of drip irrigation comes with the solutions to save water and therefore its adoption in Indian context becomes indispensable. It is important for almost all the developing agrarian nations, which often face water scarcity due to hydro-meteorological extremes like droughts, extreme events, etc., and are struggling hard to increase crop productivity. Curtailment of waste and efficient use of water in the agricultural sector should be the priority of the nation if it seriously wants to tackle the issue. The major objective of this paper is to assess the potential, current status and identify challenges related to drip irrigation development in India.