Groundwater is a major domestic-drinking water source in India, and a key element in the planning of a sustainable urban water supply services (UWSS). We investigate the underlying spatial structure in groundwater levels (GWLs) in the Indian capital, NCT-Delhi for 2022–2023, over four seasons (pre-monsoon, post-monsoon, summer, winter). We adopt a three-tier exploratory spatial data analysis (ESDM) approach, assessing the GWLs at increasing spatial resolution, starting at the smallest unit, well (local), and moving up to the tehshil (sub-regional), and finally district (regional). Results indicated GWLs varied between 4 and 68 m below ground level (mbgl), with no seasonality (p < 0.05). The tier 1 (Global Moran’s I; well-level) ESDM, followed tier-2 analysis (Local Indicators of Spatial Analysis; tehshil-level) revealed a spatial divide across NCT-Delhi, marked by statistically significant (0.05 < p < 0.0001) clustering of shallow GWLs (< 10 mbgl) in the northern parts while the deeper ones (> 20 mbgl) in south. In the 3rd tier of the ESDM (regional, district-level), we combined district-wise multiple groundwater information with GWLs, using hierarchical cluster analysis (HCA), to offer a regional ranking scheme for the urban water authorities—safer GWL areas in the north-northwest districts of NCT-Delhi, while the high priority areas (GWL depth > 40 mbgl) in the southern districts, including New Delhi. To understand the current groundwater situation in the city, we reflect on the water demand–supply gap in the UWSS, under the current business-as-usual scenario (without progressive reforms/innovation/finance) and future drought events (reduced rainfall, drying up of surface water bodies). Our lived experience of the region suggests that the widening demand–supply gap in the current UWSS has made groundwater an alternate domestic-drinking water source for a vast cross-section of urban population, resulting in indiscriminate pumping. We discuss how such preferences for groundwater, however, could undermine multiple UN Sustainable Development Goals (e.g. SDG 2, 3, 6, 7, 11, 13, 14, 15) and thwart the future aspirations for sustainable urban planning. For future, we reflect on a potential capping mechanism (setting ceilings on pumping) using a three-pronged approach that considers the: (1) regional hydrogeology, (2) urban groundwater socioecology, and (3) augmenting the capacity and efficiency of the UWSS service delivery system (coming out of the business-as-usual operation mode). The latter is critical to dissuade the urbanites from over-exploiting groundwater resources for their domestic-drinking water requirements. Overall, while our ESDM approach underscored the need for more region-specific, spatially customized groundwater interventions, instead of the traditional blanket approach (uniform across the city), we call for intensive monitoring and benchmarking of GWLs, coupled with contextual action strategies to address the growing dimensions of human-groundwater interactions in the urban context.