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Forests regulate water through coupled ecohydrological processes interlinking land, water and climate. The hydrological response of a region, although driven by climate, is a function of intrinsic watershed properties determined by corresponding land use land cover (LULC) patterns, soil characteristics and topography. The increasing anthropogenic pressure on water resources, exacerbated by climate change and forest land use conversion threatens global and regional water security and availability. Understanding the water balance in forested watersheds using physical models that simulate hydrological responses under different land use types would enable evidence-based decision-making for tropical regions in the Global South. Therefore, this study explores the influence of LULC on streamflow and water balance components to examine differences in water regulation across two watersheds with varying forest density, cover and type. The process based, semi-distributed SWAT+ hydrological model was used for quantification and assessment of key water balance components including precipitation, actual evapotranspiration, surface runoff, lateral flow and percolation for Dindori and Barwani watersheds of Narmada River basin, India. Water balance of the Barwani (1999 to 2006) and Dindori watershed (1989 to 2009) was simulated using earth observation data and calibrated with station datasets. Both watersheds demonstrated satisfactory performance in water balance simulation after calibration. Dindori watershed (higher forest cover and located in the upper catchment area of Narmada River) display greater water regulation through sustained streamflow in dry periods, better percolation and water retention in sub-surface soils as well as recharge deep aquifers when compared to Barwani (lower forest cover and a greater percentage of degraded lands) wherein a greater proportion of water is lost to the atmosphere through ET. The comparative assessment shows how forest cover modulates hydrological partitioning and enhances water resilience in tropical catchments. Integrating process-based, physical models with earth observation data, the study attempts to understand the forest-water dynamics in non-glacial, data-limited river basins and highlights the importance of conserving forested upper catchments for sustaining downstream water availability under changing land-use and climatic variability.