COVID-19 related restrictions lowered particulate matter and trace gas concentrations across cities around the world, providing a natural opportunity to study effects of anthropogenic activities on emissions of air pollutants. In this paper, the impact of sudden suspension of human activities on air pollution was analyzed by studying the change in satellite retrieved NO2 concentrations and top-down NOx emission over the urban and rural areas around Delhi. NO2 was chosen for being the most indicative of emission intensity due to its short lifetime of the order of a few hours in the planetary boundary layer. We present a robust temporal comparison of Ozone Monitoring Instrument (OMI) retrieved NO2 column density during the lockdown with the counterfactual baseline concentrations, extrapolated from the long-term trend and seasonal cycle components of NO2 using observations during 2015 to 2019. NO2 concentration in the urban area of Delhi experienced an anomalous relative change ranging from 60.0% decline during the Phase 1 of lockdown (March 25-April 13, 2020) to 3.4% during the post-lockdown Phase 5. In contrast, we find no substantial reduction in NO2 concentrations over the rural areas. To segregate the impact of the lockdown from the meteorology, weekly top-down NOx emissions were estimated from high-resolution TROPOspheric Monitoring Instrument (TROPOMI) retrieved NO2 by accounting for horizontal advection derived from the steady state continuity equation. NOx emissions from urban Delhi and power plants exhibited a mean decline of 72.2% and 53.4% respectively in Phase 1 compared to the pre-lockdown business-as-usual phase. Emission estimates over urban areas and power-plants showed a good correlation with activity reports, suggesting the applicability of this approach for studying emission changes. A higher anomaly in emission estimates suggests that comparison of only concentration change, without accounting for the dynamical and photochemical conditions, may mislead evaluation of lockdown impact. Our results shall also have a broader impact for optimizing bottom-up emission inventories.