Virtual Water is the amount of water used for the production of a good, product or service. It is also known as "embedded, embodied or hidden water".
The Water Footprint is an indicator of water use that looks at both direct and indirect water use of a consumer or producer. The water footprint of an individual, community or business is defined as the total volume of freshwater that is used to produce the goods and services consumed by the individual or community or produced by the business.
Professor John Anthony Allan from King’s College London and the School of Oriental and African Studies was the creator of the virtual water concept, which measures how water is embedded in the production and trade of food and consumer products.
Virtual water trade refers to the idea that when goods and services are exchanged, so is virtual water. When a country imports one kilogram of wheat instead of producing it domestically, it is saving about 1000 liters of real indigenous water. If this country is water scarce, the water that is 'saved' can be used towards other ends. If the exporting country is water scarce, however, it has exported 1000 liters of virtual water since the real water used to grow the wheat will no longer be available for other purposes. This has obvious strategic implications for countries that are water-constrained.