Potassium is an essential nutrient that contributes to the survival of wheat once subjected to water deficit conditions. A field trial was conducted using a randomized complete block design with splitplot arrangements. Different water regimes, including well-watered and water-deficit conditions at the tillering stage, were maintained in the main plot. Subplot treatments included no potassium; soil applied the recommended dose of potassium, distilled water spray, 1% potassium spray, and 2% potassium spray, respectively. A significantly higher value of gas exchange characteristics, water relations, and wheat yield was recorded with the foliar application of potassium than those of the control. The foliar spray of 2% potassium was superior to soil-applied potash under water deficit conditions, with a 25.33% improvement in grain yield of wheat. Similarly, a 47.58% and 25.76% improvement in grain yield of wheat was recorded with 2% and 1% potassium spray as compared to that of distilled water spray under water deficit conditions. The chlorophyll content, cell membrane stability, relative water content, net photosynthetic rate, stomatal conductance, and transpiration rate were 21.5%, 26.07%, 2.79%, 84.41%, 13.84%, and 10%, respectively. Irrigation water use efficiency under drought conditions was 51.02% higher with a 2% foliar spray of potash than in well-watered conditions where potassium was not applied. The benefit-cost ratio was recorded as 1.24 and 1.30 with 2% foliar application of potassium and soil-applied potassium, respectively. Our findings displayed that a 2% foliar spray of potash can be utilized under water deficit conditions for improvement of grain yield, whereas soil application of potash can be utilized with additional benefits.