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Northern India is a densely populated subtropical region with heavy aerosol loading (mean aerosol optical depth or AOD is ∼0.7), frequent heat waves, and strong atmosphere–biosphere coupling, making it ideal for studying the impacts of aerosols and the temperature variation in latent heat flux (LH) and evaporative fraction (EF). Here, using in situ observations during the onset of the summer monsoon over a semi-natural grassland site in this region, we confirm that strong co-variability exists among aerosols, LH, air temperature (Tair), and the vapor pressure deficit (VPD). Since the surface evapotranspiration is strongly controlled by both physical (available energy and moisture demand) and physiological (canopy and aerodynamic resistance) factors, we separately analyze our data for different combinations of aerosols and Tair/VPD changes. We find that aerosol loading and warmer conditions both reduce sensible heat (SH). Furthermore, we find that an increase in atmospheric VPD tends to decrease the gross primary production (GPP) and, thus, LH, most likely as a response to stomatal closure of the dominant grasses at this location. In contrast, under heavy aerosol loading, LH is enhanced partly due to the physiological control exerted by the diffuse radiation fertilization effect (thus increasing EF). Moreover, LH and EF increases with aerosol loading even under heat wave conditions, indicating a decoupling of the plant's response to the VPD enhancement (stomatal closure) in the presence of high aerosol conditions. Our results encourage detailed in situ experiments and mechanistic modeling of AOD–VPD–EF coupling for a better understanding of Indian monsoon dynamics and crop vulnerability in a heat stressed and heavily polluted future India.