I think that the answer depends on geographical zone. In Northern or tropical forest areas with annual rain above evaporation the distance from water reservoir matter little. In a desert it matters a lot, with decline in both biomass production and diversity away from water. But if we are in desert geographical zone but in hilly or mountain area, diversity may increase because misbalance between water supply and demand is less with the height.

It comes under tropical and sub-tropical forests of Indian Western Himalayan region.