Globalization can lead to either conservation or depletion of natural resources that are used in the production of traded goods. Rising prices may lead to better resource management. Alternatively, stronger incentives to extract these resources may exacerbate their decline- especially in open access institutional frameworks. We examine the impact of agricultural trade promotion on the groundwater extraction in India using nationally representative data from 1996-2005. We find evidence that trade promotion led to increased extraction of the reserves. In areas deemed over-exploited by the government, groundwater depleted by an additional 2.5 meter or 1 within district standard deviation. This large decline had economically signicant distributive consequences. While large and marginal farmers did not experience any real welfare changes, we detect a 1 standard deviation decline in real mean per capita expenditure for small farmers in such areas. We also quantify the social cost of groundwater depletion due to increased agricultural trade. Our findings indicate that the monetized value of depleted groundwater could be atleast as high as 1 billion US dollars in 1991 dollar terms.