Droughts have intensified in frequency and severity across South Asia, particularly impacting regions like Odisha, India, where agriculture remains highly dependent on monsoon rainfall. The objective of this study was to analyze drought dynamics and their relationship with climate teleconnections over a 120-year period (1901–2020) in Odisha, India. This study used Standardized Precipitation Index (SPI) at multiple timescales (SPI-3 to SPI-48), leveraging high-resolution gridded rainfall data. Long-term trends were evaluated using the Modified Mann–Kendall test and Sen’s slope estimator. Drought hotspots and spatial shifts were identified through Global Moran’s I and Local Indicators of Spatial Association (LISA). To understand climatic drivers, bivariate wavelet coherence analysis and Pearson correlation were applied between SPI-12 and major ocean-atmospheric teleconnection indices—ONI, IOD, SOI, and AMO. Findings reveal a spatial shift in drought severity from the eastern and southern regions in the early twentieth century to western and northwestern Odisha in recent decades. Decadal maps of drought characteristics (duration, severity, frequency, and intensity) show that districts such as Koraput, Nabarangpur, Nuapada, and Sundargarh experienced increasingly severe and frequent droughts since the 1970s. Strong coherence and correlation were observed between drought episodes and positive ONI and negative SOI/IOD phases, especially during significant drought years like 1965–66, 1974–75, 1987, 1999–2000, and 2009–2010. Spatial autocorrelation analysis confirmed clustering of drought-prone areas in western Odisha, while wavelet analysis highlighted dynamic, scale-specific linkages between SPI and teleconnection indices. These results underscore the non-linear and evolving nature of climate-drought interactions in Odisha. The study highlights the importance of integrating long-term drought diagnostics with teleconnection signals for proactive regional planning, improved early warning systems, and climate-adaptive policies. Graphic abstract: (Figure presented.)