Urban shrinkage, an emerging phenomenon marked by a decline in city population, is experienced by both developed and developing countries. In Asia, India hosts a significant number of shrinking cities. Over traditional population measures, night-light data emerges as a great replacement for advanced measurement of socio-economic and demographic parameters without any constraint of time and administrative boundaries. This study aims to measure urban shrinkage in India using night-light data captured by DMSP/OLS and VIIRS satellite sensors, examine spatial patterns, and verify them using population-based estimates. Despite increased economic development and availability of electricity compared to 1990, there has been a reduction in night light reflection in many parts. The results show that 20 % of cities experienced urban shrinkage in India during 1992–2021. The shrinking cities cluster in eastern, southern, and northern zones, and the spatial pattern matches with population-based estimates. The paradox of urban shrinkage in India signals a need for the enhancement of urban policies and programs. Striving for balanced urban growth is crucial for fostering economic prosperity and reducing regional inequality. An inclusive development approach for all urban settlements may help address the premature issue of urban shrinkage in India and achieve sustainable development goals.