In major cereals, excessive use of nitrogen fertilizers and low nitrogen use efficiency adversely affect land, water and food systems. Developing nitrogen-efficient cereal varieties reduces fertilizer dependence, lowers costs and minimizes environmental pollution while maintaining yield stability. These varieties enhance nitrogen uptake and assimilation, ensuring sustainable food production in low-nitrogen soils. The study aimed to assess the genetic variability for nitrogen use efficiency among 160 rice genotypes by evaluating their performance under three different nitrogen levels -N0 (0N), N50 (50% recommended dose of nitrogen (RDN) and N100 (100% RDN), during rabi season. The physiological and yield traits were recorded at the active tillering and flowering stages. The results indicated that the application of different nitrogen levels significantly affected the physiological traits such as chlorophyll index (SPAD value), leaf greenness index (NDVI), light-adapted PSII quantum yield (Fv'/Fm'), photosynthetic rate at both the stages. Also, there was a significant variation observed in yield traits such as the number of productive tillers, spikelets per panicle, 100-grain weight, spikelet fertility and grain yield among the rice genotypes under different N levels. Correlation analysis showed a significant positive relationship between Fv'/Fm' and photosynthetic rate with grain yield under N50 and N100 levels. Hierarchical clustering analysis identified the five high-yielding genotypes such as IRG91, IRG140, IRG302, IRG374 and IRG375, that performed significantly well under N50 in terms of physiological and yield traits compared to the N0 level and the reduction in yield was significantly less over N100. Future research should focus on identifying the key genes and pathways associated with NUE in rice.