Multimedia storage and image sharing over cloud platforms have increased the need for secure and privacy-preserving image authentication. Traditional watermarking methods either operate in the plaintext domain or rely on Fully Homomorphic Encryption (FHE), which incurs high computational cost and limits real-time applicability. To address these issues, this paper proposes an efficient watermarking framework that integrates Lightweight Homomorphic Encryption (LHE) with the Discrete Wavelet Transform (DWT), enabling watermark embedding and extraction directly in the encrypted domain without decryption. The host image is encrypted using LHE and decomposed using DWT, where the watermark is embedded in the low-frequency LL sub-band to ensure high imperceptibility and robustness against common attacks. Compared to FHE- based methods, LHE significantly reduces computational time and memory usage. Experimental results on grayscale images demonstrate high visual quality in terms of PSNR and SSIM, along with reliable watermark extraction. The proposed method is suitable for privacy-sensitive applications such as medical imaging, cloud storage, and digital rights management.