The residents of about 28 villages in Bundelkhand region have been taking turns to take water to hiding places of dacoits who have warned of repercussions if each village fails to bring 35 buckets of water a day.
The diktat issued by bandit chieftains on cellphones a month ago is being extended to more villages.
Fearing backlash, the villagers travel several kilometres each day hauling their quota of water.
"People are having a harrowing time in meeting the demand," says Mayank Yadav, a social activist active in the villages affected by the diktat.
"Water is scarce and supplying entails lot of trekking to places where bandits are putting up," he added.
There are seven dacoit gangs operating on both sides of Bundelkhand in Uttar Pradesh and Madhya Pradesh. The largest and deadliest one is headed by Suresh Patel Balkhariya, who has Rs 6-lakh bounty on his head.
"Villages have pooled in their resources and men to fetch the water and supply it to the gang," said Himanshu Gupta Atmiya who works on drought mitigation in region.
Atmiya said the harried villagers, mostly tribals, he met say they cannot refuse Balkhariya who in the past is said to have killed people for disobedience.
The gang, active in Banda and Chitrakoot, is believed to have two dozen members armed with latest arms and ammunition.
In contrast to last year's abundant rains, small lakes, ponds and make-shift reservoirs have dried up this year in Bundelkhand because of elusive rains, leaving dacoits reliant on villagers for water.
But since intensive police patrolling has driven them deep into forests of Patha, a terrain with no water supply lines, the dacoits issued the diktat to avoid running into security personnel.
Additional superintendent of police Swami Prasad said the police have not received any complaint from the villagers, but assured the combing operation will be further intensified.
In this crisis, however, deputy inspector general Amitabh Yash, who is credited with cleansing the region of dacoits, sees an opportunity.
"Survival is tough in these parts, but the gangs can be finished anytime if we can track their supply lines," he told HT.
In March this year, HT reported that gangs led by Balkharia and Bauri Yadav woke up people in the dead of night to warn them of dire consequences if they did not vote for candidates of (bandits') choice.