Introduction: Why India–US Relations Matter

The India–United States bilateral relationship is one of the most consequential partnerships of the 21st century. As the world’s largest and oldest democracies, India and the US share convergent interests in maintaining a rules-based international order, countering terrorism, ensuring freedom of navigation, and promoting sustainable economic growth. For UPSC GS-II, this topic spans International Relations, Bilateral & Regional Groupings, and India’s Interests Abroad.

With bilateral merchandise trade crossing $119 billion (2021–22) and the “Mission 500” target of $500 billion by 2030 announced in February 2025, the economic stakes have never been higher. The launch of COMPACT, TRUST, and the February 2026 Interim Trade Agreement underscore the relationship’s momentum and complexity.

Historical Background (1947–1991)

India–US relations during the Cold War were defined by structural divergence rather than convergence. Three interlocking factors shaped this period:

• Non-Alignment vs US Alliance System: India’s founding commitment to non-alignment under Nehru clashed with the US-led alliance architecture. While India refused to join military blocs, the US cultivated Pakistan through SEATO (1954) and CENTO as a frontline Cold War ally.
• US–Pakistan Axis: American military and economic aid to Pakistan — particularly during the 1965 and 1971 wars — was perceived by India as a direct security threat. The dispatch of USS Enterprise to the Bay of Bengal during the 1971 Bangladesh Liberation War became a watershed moment of mistrust.
• Indo-Soviet Friendship: The 1971 Treaty of Peace, Friendship and Cooperation with the USSR further alienated Washington, which interpreted India as a Soviet proxy in the bipolar contest.
• Nuclear Divergence: India’s refusal to sign the NPT (1968) and Pokhran-I (1974) triggered US sanctions and the Nuclear Non-Proliferation Act (1978), cutting off all nuclear cooperation for decades.

Timeline: Key Events (1947–1991)

Post-Cold War Reset in India–US Relations

The dissolution of the USSR in 1991 and India’s simultaneous economic liberalisation created structural conditions for a strategic re-engagement:

• Collapse of Bipolarity: The end of the Cold War removed the primary structural irritant. India lost its key strategic partner and needed to diversify its relationships.
• Economic Liberalisation (1991): India’s opening under PM Narasimha Rao and FM Manmohan Singh attracted US investment and trade, creating new commercial stakeholders in the relationship.
• Strategic Dialogue: The 1990s saw the Kickleighter proposals for military-to-military contacts, resumption of defence exercises, and the beginning of structured engagement.
• Pokhran-II Setback (1998): India’s nuclear tests initially triggered US sanctions under the Glenn Amendment, but the subsequent Jaswant Singh–Strobe Talbott dialogue (1998–2000) became the foundation for strategic understanding.
• Clinton Visit (2000): The first US presidential visit to India in 22 years signalled the beginning of a genuine reset in bilateral ties.

Key Milestones & Turning Points

Trajectory: Estrangement → Engagement → Strategic Partnership

Political & Strategic Dimension

Shared Democratic Values

India and the US derive normative legitimacy from being the world’s largest and oldest democracies. This shared identity provides a foundation for the partnership, even when specific policy differences arise. The 2+2 Ministerial Dialogue (five rounds completed by November 2023) serves as the apex institutional mechanism for strategic coordination.

Global Governance Cooperation

• US support for India’s permanent membership in a reformed UN Security Council
• Coordination in multilateral forums: G20 (India’s presidency in 2023), WTO, climate negotiations
• Collaboration in I2U2 Group (India, Israel, UAE, US) and the India–Middle East–Europe Corridor (IMEC) — announced as a counterweight to China’s BRI
• Joint leadership on the Indo-Pacific Economic Framework for Prosperity (IPEF)

Indo-Pacific Vision

Both nations share a vision for a free, open, inclusive, and rules-based Indo-Pacific. This strategic convergence — centred on the Quad, joint naval exercises, and maritime domain awareness — forms the centrepiece of the contemporary relationship.

Defence & Security Cooperation

Defence cooperation has emerged as the most transformative pillar of India–US relations. From near-zero engagement during the Cold War, defence procurement from the US has grown to over $20 billion since 2008. India conducts more joint military exercises with the US than with any other country.

Foundational Defence Agreements

Major Joint Military Exercises

Key Defence Developments (2022–2025)

• iCET & INDUS-X (2022–23): The Initiative on Critical and Emerging Technology and the India-US Defence Acceleration Ecosystem have created an innovation bridge connecting defence startups, academia, and investors across both countries. Three INDUS-X summits held by September 2024.
• GE F414 Jet Engine Deal (2023): Landmark agreement for GE Aerospace to co-produce F414 engines in India for the LCA Tejas Mk-II — the most significant technology transfer in India–US defence history, with ~80% tech transfer.
• MQ-9B Reaper Drones (2024): Deal signed for India to acquire MQ-9B armed drones for enhanced maritime surveillance and ISR capabilities.
• COMPACT (Feb 2025): “Catalyzing Opportunities for Military Partnership, Accelerated Commerce & Technology” — new umbrella initiative launched during PM Modi’s Washington visit.
• TRUST (Feb 2025): “Transforming the Relationship Utilizing Strategic Technology” — expands cooperation in AI, quantum computing, and critical technologies.
• INDUS Innovation: Renamed initiative for co-production and technology sharing in advanced jet engines and armoured vehicles.

Nuclear Cooperation & Strategic Trust

The 2005–08 civil nuclear deal remains a watershed — transforming a relationship marred by decades of nuclear disagreements into one characterised by strategic trust and technology partnership.

Key Components

• Hyde Act (2006): US domestic legislation exempting India from Section 123 of the Atomic Energy Act, enabling nuclear trade without NPT membership. Created a legal framework for civilian nuclear cooperation with bipartisan Congressional support.
• 123 Agreement (2007–08): Bilateral agreement for peaceful uses of nuclear energy. India agreed to place civilian nuclear facilities under IAEA safeguards and maintain a voluntary moratorium on nuclear testing.
• NSG Waiver (2008): The Nuclear Suppliers Group granted India a “clean waiver,” enabling nuclear commerce with all 48 NSG members — a de facto recognition of India’s responsible nuclear stewardship without formal NPT membership.

Current Status & Future

• Westinghouse AP-1000 Reactors: Agreement for six reactors in Andhra Pradesh. Negotiations on nuclear liability (India’s Civil Liability for Nuclear Damage Act, 2010) and commercial terms continue.
• Small Modular Reactors (2025): The February 2025 summit committed to developing US-designed nuclear modular reactors in India, marking a new chapter in nuclear cooperation.

Counter-Terrorism Cooperation

Counter-terrorism has been a consistent area of convergence, strengthened substantially after the 26/11 Mumbai attacks and through shared concerns about Pakistan-based terrorism:

• CT Cooperation Initiative (2010): Expanded intelligence sharing, information exchange, operational cooperation, and counter-terrorism technology transfer.
• Designation of Terrorists: The US designated Hizbul Mujahideen chief Syed Salahuddin as a Specially Designated Global Terrorist (2017). Both countries coordinate on terror listing proposals at the UNSC.
• Joint Call on Pakistan: Consistent reiteration — in every joint statement since 2017 — that Pakistan must bring to justice the perpetrators of the 26/11 Mumbai and Pathankot attacks and deny safe haven to terrorist groups.
• Tahawwur Rana Extradition (April 2025): The extradition of Rana from the US to India for his role in the 26/11 attacks marked a historic milestone — the first terrorism-related extradition between the two countries.
• Institutional Mechanisms: Joint Working Group on Counter-Terrorism, Designations Dialogue, Homeland Security Dialogue, and Bilateral Cyber Dialogue provide regular platforms.

Economic, Trade & Investment Relations

Trade Overview

Institutional Mechanisms

• Trade Policy Forum (TPF): Apex bilateral trade forum, co-chaired by India’s Commerce Minister and the USTR.
• Commercial Dialogue: Sixth edition held in Washington DC, October 2024. Signed MoU on Critical Mineral Supply Chains.
• CEO Forum: Established in 2005; provides private sector recommendations to both governments.

Trade Irritants & 2025–26 Tariff Crisis

• US concerns: India’s market access barriers, agricultural tariffs, and IP protection gaps
• India’s concerns: H-1B visa restrictions, data localisation demands, WTO disputes (solar panel case, 2013–16)
• 2025 Tariff Escalation: Trump imposed reciprocal tariffs up to 50% on Indian goods (25% reciprocal + 25% penalty for Russian oil imports). India termed these “unfair, unjustified and unreasonable”
• February 2026 Interim Agreement: After months of negotiations — US tariffs settled at 18%; India to eliminate/reduce barriers on US industrial goods and agricultural products; India committed to $500 billion in US purchases over 5 years; expanded digital trade rules

Energy, Climate Change & Technology

Energy Cooperation

• US–India Energy Dialogue (2005): Six working groups — oil & gas, coal, power & efficiency, renewables, civil nuclear, sustainable development
• LNG Exports: Indian companies signed $30+ billion in long-term LNG contracts from US facilities
• $500 Billion Procurement (2025–30): India committed to purchasing US energy, aircraft, technology products, precious metals, and coking coal

Climate & Clean Energy

• US–India Clean Energy Finance Task Force: Mobilising private investment in India’s $1.2 trillion power market
• $1 billion multilateral financing for renewable energy, energy storage, and zero-emission vehicles (under 2024 Roadmap)
• Green Transition Fund: NIIF and US DFC committed up to $500 million each
• US joined India’s International Solar Alliance (2021) and co-chairs CDRI’s Governing Council

Technology Partnerships

• iCET (2022): Steered by NSAs; covers AI, quantum computing, 5G/6G, biotechnology, semiconductors, and space
• TRUST (2025): New initiative to expand innovation and technology cooperation
• Pax Silica: India invited to join US-led initiative for secure silicon supply chains; signing expected 2026
• Space Cooperation: Spaceflight Agreement signed; Indian Gaganyaatri selected for ISRO-NASA joint mission
• GPU & Data Centre Trade: Feb 2026 interim agreement significantly expands trade in GPUs and data centre technology

People-to-People Ties & Diaspora

Indian American Diaspora

The 4-million-strong Indian American community is one of the most influential ethnic groups in the US, serving as a powerful bridge for bilateral relations. Indian Americans hold prominent positions across politics (VP Kamala Harris; multiple House and Senate members), technology (CEOs of Google, Microsoft, IBM), and academia — contributing significantly to campaign financing, policy advocacy, and cultural diplomacy.

Education & Students

• Over 300,000 Indian students in the US (2025), contributing $8+ billion annually to the US economy
• Indian students are the second-largest international cohort after China
• Quad Fellows programme provides 25 STEM graduate scholarships annually for Indian students

Innovation & Startups

• Silicon Valley has a significant Indian entrepreneurial presence — Indian-origin professionals have co-founded a disproportionate number of US tech unicorns
• Cross-border innovation networks strengthen the technology dimension of the partnership
• The February 2025 Joint Statement recognised talent flow and movement of students and researchers as mutually beneficial

India–US Relations in the Trump Era

Trump 1.0 (2017–2021): Transactional Pragmatism

• Trade Tensions: Withdrawal of India’s GSP benefits (2019); demands for greater market access, IP protection, and tariff reductions
• Defence Boost: COMCASA (2018) and BECA (2020) signed; Apache & Chinook sales; STA-1 status; “Major Defence Partner” operationalised
• Counter-Terrorism: Designation of Syed Salahuddin; strong joint statements against Pakistan-based terrorism
• Indo-Pacific Strategy: “Free and Open Indo-Pacific” concept gained traction; Quad revived at leaders’ level

Trump 2.0 (2025–Present): Opportunities & Strains

• February 2025 Summit: PM Modi’s early visit to Washington resulted in COMPACT, TRUST, and Mission 500. Both leaders reaffirmed the Comprehensive Global Strategic Partnership.
• Tariff Escalation (Mid-2025): “Liberation Day” tariffs imposed 25% reciprocal tariffs, plus an additional 25% penalty tied to India’s Russian oil imports — totalling 50%. India described these as “unfair, unjustified and unreasonable.”
• India’s Assertive Response: Maintained strategic autonomy; refrained from concessions; diversified partnerships with Russia, China, and EU. Defence procurements continued on track despite media speculation.
• Pakistan Equidistance Issue: Indian officials expressed frustration at Trump hosting Pakistan’s army chief and claiming credit for mediating the May 2025 India-Pakistan military standoff.
• February 2026 Resolution: Interim trade agreement — US tariffs reduced to 18%; India opens markets on industrial goods, agricultural products; commits to $500 billion purchases over 5 years.

India–US Relations in the Biden Era & Beyond

The Biden administration (2021–2025) elevated India–US relations to unprecedented heights, driven by strategic convergence on China, technology, and the Indo-Pacific:

Key Achievements

• Quad Institutionalisation: Regular leaders’ summits; expanded agenda — vaccines, climate, critical technologies, cyber, maritime security, infrastructure
• iCET Launch (2022): Steered by NSAs; comprehensive technology cooperation framework
• INDUS-X (2023): Defence innovation ecosystem connecting governments, startups, academia, investors
• GE F414 Engine Deal (2023): ~80% technology transfer for co-production — most significant in the relationship’s history
• PM Modi’s State Visit (June 2023): Addressed joint session of Congress (second time); major defence, tech, and space agreements
• 2+2 Ministerial Dialogue: Fifth round (Nov 2023) deepened cooperation across all domains
• MQ-9B Drone Deal (Oct 2024): Enhanced maritime ISR capabilities for India

Challenges Under Biden

• Friction over India’s neutrality on Russia-Ukraine conflict and surging Russian oil imports
• Khalistani separatism issue and the Pannun assassination plot allegations
• US concerns over democratic governance, press freedom, and religious minorities in India

Areas of Convergence

Areas of Divergence & Irritants

India–US Relations in the Indo-Pacific Context

QUAD (Quadrilateral Security Dialogue)

The Quad (India, US, Japan, Australia) has evolved from a nascent concept (2007) to the primary multilateral vehicle for Indo-Pacific cooperation. Elevated to leaders’ level in 2021, it now covers vaccines, climate, technology, cyber, maritime security, and infrastructure. India is set to host the next Quad Leaders’ Summit.

Maritime Security Architecture

• Indo-Pacific Maritime Domain Awareness (IPMDA): Partnership to enhance maritime surveillance using commercial satellite data and AI
• Indian Ocean Strategic Venture (2025): New bilateral, whole-of-government forum for coordinated investments in economic connectivity across the Indian Ocean
• Freedom of Navigation: Both countries support UNCLOS-based freedom of navigation. Joint exercises in the South China Sea and Indian Ocean

IMEC and I2U2

The India–Middle East–Europe Corridor (IMEC) and I2U2 Group link India, the US, Israel, UAE, and European partners for connectivity, trade, and infrastructure — positioned as alternatives to China’s Belt and Road Initiative. Leaders committed to convening new initiatives within 2025.

Challenges & Limitations

Structural Challenges

• Strategic Autonomy vs Alignment: India’s multi-aligned foreign policy creates friction with US expectations of bloc-alignment. India’s BRICS engagement, Russian energy imports, and independent stance on conflicts test the partnership’s tolerance for divergence.
• Domestic Politics: US election cycles, protectionist lobbies, and India’s coalition dynamics create policy uncertainty. The relationship’s dependence on leader-level chemistry (Modi-Trump/Biden) makes it vulnerable to political transitions.
• Institutional Mismatch: Differences in regulatory frameworks, procurement procedures, and technology transfer policies continue to slow defence-industrial cooperation despite high-level political will.

Global Uncertainties

• A potential US–China accommodation could marginalise India — the more Beijing is seen as a severe threat, the more Washington values New Delhi
• Global trade fragmentation and supply chain restructuring create both opportunities and disruptions
• Rapid technology evolution (AI, quantum, biotech) requires agile policy coordination that bureaucracies struggle to deliver

Way Forward

• Issue-Based Cooperation: Move beyond leader-level summitry to institutionalised, issue-specific cooperation mechanisms (iCET, INDUS-X, COMPACT) that survive political transitions in both capitals.
• Strategic Autonomy as Strength: Frame India’s multi-alignment not as a liability but as an asset — a partner with independent credibility across regions, valuable precisely because it is not a treaty ally.
• Defence Industrial Integration: Operationalise co-development and co-production (GE F414 as template); deepen supply chain integration; expand INDUS-X to include more startups.
• Trade Rebalancing: Implement the February 2026 interim agreement; pursue a comprehensive Bilateral Trade Agreement (BTA); resolve WTO disputes through negotiated outcomes.
• Technology Commons: Build shared infrastructure in semiconductors, AI governance, and critical minerals. Operationalise iCET deliverables at scale.
• People-to-People Expansion: Ease visa regimes for students and professionals; expand Quad Fellowship; deepen university partnerships.
• Indo-Pacific Architecture: Strengthen Quad institutionally; operationalise IMEC and I2U2; develop the Indian Ocean Strategic Venture as a permanent platform.

UPSC Mains Previous Year Questions (PYQs)

The following PYQs from the GS-II Mains paper are directly or thematically relevant to India–US relations:

Direct India–USA Questions

Thematically Related PYQs (India & the World / Indo-Pacific)

Polity – Comparison PYQs (India & USA Constitutions)

Related Thematic PYQs

Mains Questions with Answer Frameworks

Conclusion

India–US relations represent one of the most significant strategic partnerships of the 21st century. The trajectory — from Cold War estrangement through post-liberalisation engagement to a Comprehensive Global Strategic Partnership — demonstrates the power of converging interests to overcome historical mistrust. The partnership is anchored in shared democratic values, deepening economic interdependence, and a convergent Indo-Pacific vision, even as it navigates persistent tensions around trade, energy sovereignty, and strategic autonomy.

The 2025–26 tariff crisis and its resolution through the Interim Trade Agreement illustrate both the vulnerabilities and resilience of the relationship. As India overtakes Japan to become the world’s fourth-largest economy and its strategic weight grows, the partnership will increasingly be defined not by what divides but by what unites — a shared interest in a multipolar world where both democracies can thrive.

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