The use of drip irrigation in upland rice cultivation is a contemporary water-saving strategy however, inadequate evidence available related to consequential changes in water productivity on rice yield. The effects of distinctive drip irrigation treatments viz., differences in lateral distances [0.6, 0.8 and 1.0 m], dripper discharge rates [0.6 and 1.0 litre per hour], irrigation methods [surface and sub-surface] and the conventional aerobic rice production system (control) on, physiology and water productivity of rice were studied during summer 2012 and 2013. Grain yield significantly increased in sub-surface drip irrigation method laid out at 0.8 m lateral distance and in 1.0 litre per hour (lph) discharge rate (5389 kg ha-1) compared with control irrigation method (4181 kg ha-1). This treatment mount up dry matter partitioning, leaf photosynthesis as well as root oxidizing power. In addition, drip irrigation in aerobic rice production system had twice the water productivity and stimulates longer roots with higher density compared with control irrigation method. The sub-surface drip irrigation system with drippers/laterals of 0.8 m distance with flow rate 1.0 lph, in aerobic rice production system is a cost-effective method and had the potential to save water (27.0 %) without compromising for grain yield in comparison to control irrigation method. This could be the promising technology to be recommended for aerobic rice production system.