The changing dynamics in climate is the primary and important determinant of agriculture productivity. The effects of this changing climate on overall productivity in agriculture can be understood when we study the effects of individual components contributing to the changing climate on plants and crops. Elevated CO₂ and drought due to low variability in rainfall is one of the important manifestations of the changing climate. There is considerable amount literature that addresses these aspects in terms of effects on plants systems from molecules to ecosystems. Of particular interest is the effect of increased CO₂ on plants in relation to drought and water stress. As it is known that one of the consistent effects of increased CO₂ in the atmosphere is increased photosynthesis, especially in C3 plants, it will be interesting to know the effect of drought in relation to elevated CO₂. The possible mechanisms by which this occurs will be discussed in this minireview. Interpreting the effects of short term and long term exposure of plants to elevated CO₂ in context of ameliorating the negative impacts of drought will show us the possible ways by which there can be effective adaption to crops in the changing climate scenario.