Except this plant is in Gujarat, and the distance from the southern most city I could find in Punjab to Dholera, GJ is 1048 km.

https://imgur.com/a/HaN5Qb7

Oh ok the fab in Chandigarh had been mentioned

Chandigarh is connected to HP's water system. There are multiple dams just a couple miles away of CH.

Not severely.

The issue is bad maintenance of rural agricultural water infra due to political promises 10 years ago for 100% free water for farmers in Punjab, and negotiating with neighboring Himachal Pradesh and Jammu Kashmir over water rights.