India US Relations, History, Areas of Cooperation, Tariff Hikes, UPSC Notes!
India–US relations form one of the most significant bilateral partnerships in global geopolitics, driven by shared democratic values, strategic interests, and expanding economic ties. From defense cooperation and technology sharing to trade, climate action, and people-to-people exchanges, this multifaceted relationship has evolved into a comprehensive global strategic partnership.
For UPSC aspirants, understanding India–US relations is vital to cover topics in International Relations, current affairs, and GS Paper 2.
Download Free UPSC Study Materials for IAS Preparation!
Download the India US Relations UPSC Mains Questions!
Why in News?
The relationship between India and the United States is currently experiencing significant tension, primarily due to recent actions by the US administration and a dispute over trade and energy policy. Despite this, both sides have affirmed that India remains a "strategic partner."
Tariffs and Trade Dispute
- US President Donald Trump has imposed new tariffs on Indian goods, bringing the total levy on some exports to 50%.
- The US cited India's continued purchase of Russian oil as a primary reason for the tariff hike.
- India's Ministry of External Affairs (MEA) has called the tariffs "unfair, unjustified, and unreasonable," but has also stated a commitment to constructive dialogue.
- Trade talks between the two countries, which had been ongoing for a bilateral trade agreement (BTA), have stalled. A US delegation is scheduled to visit India later this month for a new round of talks.
Russian Oil Imports
- India has significantly increased its import of discounted Russian oil since the conflict in Ukraine began.
- The US administration views this as a direct lifeline for Russia and a threat to US national security.
- India has defended its position, stating that its oil purchases are a "national compulsion" to meet its energy needs and that the US and its allies also continue to trade with Russia in other goods.
Strategic Partnership and Geopolitical Concerns
- Both the US State Department and Indian officials continue to refer to the bilateral relationship as a "strategic partnership."
- However, the recent tensions have raised questions about the stability of this partnership, particularly in forums like the Quad (the Quadrilateral Security Dialogue with the US, India, Japan, and Australia).
- Some analysts suggest that the US actions are an attempt to force India to make a choice between its relationships with Russia and the US.
- Indian officials have emphasized the bipartisan nature of the relationship, noting that it has deepened under various governments, and have also highlighted President Trump's past support on issues like counter-terrorism.
India US Relations - An Overview
India and the United States have a friendly and growing relationship built on shared democratic principles and mutual respect. Both nations believe that people should be involved in how their countries are run and that the world should be peaceful and prosperous. This shared view brings them together to discuss important matters like keeping international waters open for ships, having fair trade rules, and helping all countries develop. While both nations continue to work together on challenges such as countering regional aggression and promoting a free and open Indo-Pacific, a recent shift in U.S. policy has created a major diplomatic challenge.
|
India and US Relations |
|
|
Category |
Details |
|
Nature of India-US Relations |
A comprehensive global strategic partnership currently facing severe strains due to trade disputes and geopolitical divergence. |
|
Bilateral Trade (2024-25) |
Bilateral trade stood at US$131.8 billion. The long-term goal of US$500 billion by 2030 is now in jeopardy due to new tariffs. |
|
Major Defence Agreements |
The foundational agreements (LEMOA, COMCASA, BECA) and the INDUS-X initiative remain in place, but new defense deals are being scrutinized amid trade tensions. The U.S.-India COMPACT initiative was launched in February 2025. |
|
Key Defence Platforms |
India continues to be a major importer of US military equipment. Joint production of jet engines is still being negotiated. |
|
Diaspora Size |
Over 4.5 million people of Indian origin in the US, widely considered a "living bridge" that strengthens cultural and political ties. |
|
Strategic Platforms |
Quad (India, US, Japan, Australia), I2U2 (India, Israel, UAE, US), and a strong presence in the G20. The Quad continues to launch new initiatives. |
|
Civil Nuclear Agreement |
The landmark 2008 agreement that ended India's nuclear isolation remains a key milestone in the relationship. |
Read the article on India’s Bilateral Relations!
UPSC Beginners Program
Get UPSC Beginners Program - 60 Days Foundation Course SuperCoaching @ just
People also like
The history of India and US relations can be broadly divided into three distinct phases:
- the Cold War era,
- the post-Cold War era, and
- the modern strategic partnership.
In the years after India became independent in 1947, India US relations followed a specific path.
India US Relations during the Cold War
In the initial decades after India's independence in 1947, the relationship was marked by a policy of Non-Alignment. India chose not to formally align with either the US or the Soviet Union, preferring to maintain its strategic autonomy. This often led to a strained and transactional relationship with the US, which was a key ally of India's rival, Pakistan. The US also had a closer strategic alignment with Pakistan due to its role in the Cold War containment policy. This period was characterized by suspicion and a lack of a deep, institutionalized strategic connection, with the US often providing limited aid and political support.
India US Relations after the Cold War
The collapse of the Soviet Union in 1991 marked a turning point. With the end of the Cold War, India and the US began to find new common ground. India's economic liberalization policies, which opened up its economy, aligned with the US's free-market ideology, leading to a significant increase in bilateral trade and investment. The shared belief in democratic values became a stronger force for convergence. The relationship deepened further in the wake of the 9/11 attacks, with both countries identifying as partners in the global war on terror. This era culminated in the landmark 2008 US-India Civil Nuclear Agreement, which was a huge symbolic and strategic leap. It effectively ended India's nuclear isolation and demonstrated a profound increase in trust between the two nations.
India US Relations in the Modern Era
This period, starting roughly with the signing of the nuclear deal, saw a qualitative shift. The relationship moved beyond transactional to strategic. Under various administrations, both countries have worked to institutionalize this partnership. However, in the current phase (beginning in 2025), a new U.S. administration has prioritized domestic economic concerns and punitive actions against partners who trade with rivals. This has led to the relationship being tested by direct tariffs and diplomatic pressure, creating a challenging environment despite ongoing cooperation in defense and technology.
Read the article on India's Relations with Neighbouring Countries!
India and the US work together in many different areas, making their partnership very broad and strong. This multi-faceted approach defines the India US relationship.
Defence Cooperation
Defence cooperation remains one of the strongest pillars of the relationship. The two nations have signed key foundational defence agreements like LEMOA (Logistics Exchange Memorandum of Agreement), COMCASA (Communications, Compatibility and Security Agreement), and BECA (Basic Exchange and Cooperation Agreement). These agreements allow for greater interoperability, intelligence sharing, and logistical support.
- Joint Military Exercises: They conduct regular and advanced military drills, such as the Malabar exercise (naval), Yudh Abhyas (army), and Cope India (air force).
- Defence Trade and Technology: India is a major buyer of US military equipment. The INDUS-X initiative is promoting defence industrial cooperation, and the new U.S.-India COMPACT was launched in February 2025 to accelerate military partnership and technology collaboration.
Trade and Investment
The economic relationship is a critical driver, but it is currently under significant strain. While bilateral trade was over US$130 billion in 2024-25, new tariffs threaten this progress.
- Trade Volume and Sectors: India's exports to the US include IT services, pharmaceuticals, gems, and textiles. Key US exports to India are machinery, defense equipment, and software.
- Investments: US companies are major investors in India's technology, finance, and manufacturing sectors. Similarly, Indian companies are investing in the US, fostering economic growth in both countries.
Read the article on India-West Diplomatic Relations!
Technology and Innovation
Collaboration in cutting-edge technologies is a defining feature of the modern partnership, particularly through the Initiative on Critical and Emerging Technologies (iCET).
- Space Cooperation: India's involvement in US-led space missions shows growing teamwork in satellite technology and commercial space.
- Emerging Technologies: Both countries work together on:
- Artificial Intelligence (AI)
- Quantum Computing
- Biotechnology
- Advanced Materials
- Semiconductors: Under the TRUST initiative, US companies are helping India build a strong system for making computer chips. This technology focus is central to the India US relationship.
People-to-People Connections
The strong bonds between the people of India and the US form a living bridge, making the bilateral relationship deeper and more lasting.
- Indian Diaspora: Over 4.5 million people of Indian origin live in the US. They work in various fields like healthcare, science, education, and business, contributing to US society and linking the two cultures.
- Education: Indian students make up 27% of all international students in the US, strengthening intellectual and cultural ties.
- Cultural Exchange: Tourism, cultural programs, and professional visits help people understand each other better.
Read the article on India EU Relations!
Areas of Contention between India and US
Despite the close partnership, several key issues remain points of friction and now represent a major diplomatic crisis.
Trade Disputes and Tariffs
This is a recurring area of conflict that has now escalated to a new level.
- The U.S. has imposed a 50% tariff on most Indian goods, a move that is described as a penalty for India's continued purchase of Russian oil.
- India has countered that these tariffs are "unjustified" and has accused the US of "double standards," noting that the US itself imports Russian goods like uranium and fertilizers.
- These tariffs have made a bilateral trade agreement, which was previously being negotiated, a distant prospect.
India's Defence Ties with Russia
India's long-standing and extensive defence relationship with Russia remains a major concern for the US. The U.S. administration has directly linked India's Russian oil purchases to the war in Ukraine, using it as justification for the new tariffs. This puts India in a difficult position as it seeks to maintain its strategic autonomy while managing its relationship with its key strategic partner.
Divergent Stances on Global Issues
While both countries share a vision for a free and open Indo-Pacific, their approaches to other global issues can differ. India's emphasis on strategic autonomy means it may not always align with US policy. A prime example is India's neutral stance on certain geopolitical conflicts and its decision to attend the SCO summit, which has been a point of friction with the US and its allies.
Read the article on India UK Relations!
The India US relationship is very important, not just for these two countries, but for the whole world. Its significance comes from several key reasons:
- Global Security: Their teamwork helps keep the world peaceful, especially in the Indo-Pacific region, where they work to protect shipping routes. This joint effort contributes to global stability.
- Economic Growth: When two of the world’s biggest economies trade and invest in each other, it helps the global economy recover and grow faster. This creates jobs and new ideas worldwide, thus a boost for the global economy.
- Addressing Global Challenges: The partnership is vital for solving big world problems that no single country can fix alone:
- Counter-terrorism: They work together to fight terrorism and share important information.
- Health Security: They collaborate on vaccines and disease control.
- Climate Change: They promote green technology and clean energy.
- Cybersecurity: They take joint steps to make digital systems safe.
- Promoting Democratic Values: Their partnership is a strong example of how democracies can work together effectively. It inspires other nations that believe in freedom and fairness. This shared commitment is a defining feature of the India US bilateral relationship.
Read the article on India Japan Relations!
How can the relationship between India & US be strengthened?
To navigate the current challenges and make the India-US relationship even stronger, both countries can focus on these key areas.
- Regular High-Level Dialogues: Continued meetings between leaders and regular 2+2 dialogues (Foreign and Defence Ministers) are important to build trust and plan together. The current climate calls for "very creative diplomacy" to find a pragmatic path forward.
- Expand Economic Cooperation: Both countries must find a way to resolve the current trade disputes and resume negotiations for a mutually beneficial trade agreement. Easing tariffs and addressing market access issues are crucial to achieving the US$500 billion trade goal.
- Deepen Technology Ties: They should do more joint research in AI, biotechnology, and 6G technologies. The U.S.-India COMPACT and the Quad Critical Minerals Initiative are positive steps that must be continued despite other tensions.
- Improve Defence Engagement: Jointly developing military equipment and training more together will make both countries safer. The focus should be on co-development and co-production, not just imports.
- Strengthen People Links: Offer more scholarships and exchange programs for students and professionals. Simplifying visa processes can also help people travel and work more easily between countries, preserving the "living bridge" that connects the two nations.
UPSC PYQs on India US Relations
|
UPSC Previous Year Questions on India US Relations 2023 'The expansion and strengthening of NATO and a stronger US-Europe strategic partnership works well for India.' What is your opinion about this statement? Give reasons and examples to support your answer. (15 marks) 2022 How will the I2U2 (India, Israel, UAE and USA) grouping transform India's position in global politics? (15 marks) 2021 “The USA is facing an existential threat in the form of China, that is much more challenging than the erstwhile Soviet Union.” Explain. (15 marks) 2020 What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (15 marks) 2018 In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation? (15 marks) ‘India’s relations with Israel have, of late, acquired a depth and diversity, which cannot be rolled back.” Discuss. (15 marks) Indian and the USA are two large democracies. Examine the basic tenets on which the two political systems are based. 2015 Terrorist activities and mutual distrust have clouded India – Pakistan relations. To what extent the use of soft power like sports and cultural exchanges could help generate goodwill between the two countries? Discuss with suitable examples. (This question has relevance to the broader regional dynamics involving the US). (12.5 marks) 2014 The proposed withdrawal of the International Security Assistance Force (ISAF) from Afghanistan in 2014 is fraught with major security implications for the countries of the region. Examine in light of the fact that India is faced with a plethora of challenges and needs to safeguard its own strategic interests. (This question has a direct bearing on India-US cooperation in Afghanistan). (10 marks) |
Stay connected with us for more such topics related to UPSC by downloading the Testbook App now!
More Articles for IAS Preparation
- national supercomputing mission india
- Which BSc Course is Best for UPSC? - Subjects to Choose from and Overlapping with UPSC Preparation!
- Which BA Course is Best For UPSC? Choose the Best BA Course!
- Amended Technology Upgradation Fund Scheme
- Model Code Of Conduct
- Citizen Charter
- Immunisation Drive In India
- Target Olympic Podium Scheme
- Taxation In India
- Battle Of Wadgaon
