Water scarcity is increasingly becoming a global concern, intensified by urbanization, climate change, and unsustainable water management practices. In India, major industrial cities like Jamshedpur remain under severe water stress situations arising from increasing demand, pollution, and infrastructure‐less efficiency. This study looks into the present water crisis in Jamshedpur by describing major drivers for it, reviewing past trends, and then suggesting sustainable options that might fit in well with the particular socio‐industrial conditions of the city. A GIS‐based spatial analysis using Kriging interpolation of groundwater records (2010–2022) was performed, followed by validation having an RMSE value of 0.00424 bcm. In addition, the study scrutinized government reports, local‐level case studies, and institutional records that attempted to gauge demand, pollution levels, and governance challenges. The findings highlight a 20%–30% gap between water demand and supply as well as a massive groundwater decline in some places where the water level is going down by over 10 m in 10 years. Such a scenario arises due to industrial overexploitation and a terribly fragmented governance scenario. Spatial maps are shown concerning at‐risk areas with respect to a water crisis in the future. To achieve long‐term water security, the study suggests the implementation of integrated water resources management (IWRM), rainwater harvesting, wastewater reuse, and making a strong push for public‐private partnerships while promoting community engagement, as well as data‐based decision‐making, to increase climate resilience. The findings are not only relevant to Jamshedpur but also offer a replicable framework for other industrial cities grappling with water scarcity under climate uncertainty.