This study investigates some of the benefits and drawbacks of assimilating Terrestrial Water Storage (TWS) observations from the Gravity Recovery and Climate Experiment (GRACE) into a land surface model over India. GRACE observes TWS depletion associated with anthropogenic groundwater extraction in northwest India. The model, however, does not represent anthropogenic groundwater withdrawals and is not skillful in reproducing the interannual variability of groundwater. Assimilation of GRACE TWS introduces long-term trends and improves the interannual variability in groundwater. But the assimilation also introduces a negative trend in simulated evapotranspiration whereas in reality evapotranspiration is likely enhanced by irrigation, which is also unmodeled. Moreover, in situ measurements of shallow groundwater show no trend, suggesting that the trends are erroneously introduced by the assimilation into the modeled shallow groundwater, when in reality the groundwater is depleted in deeper aquifers. The results emphasize the importance of representing anthropogenic processes in land surface modeling and data assimilation systems.