Modern India-us Relations

MODERN INDIA-US RELATIONS

Today, the India-US bilateral cooperation is broad-based and multi-sectoral, covering trade and investment, defence and security, education, science and technology, cyber security, high-technology, civil nuclear energy, space technology and applications, clean energy, environment, agriculture and health.

India-US bilateral relations have developed into a “global strategic partnership”, based on shared democratic values and increasing convergence of interests on bilateral, regional and global issues.

Reasons for the qualitative transformation in India-US relations:

An evolving geo-political convergence and growing discomfort in the US about China.

The rising stature of India on the global stage.

MAJOR AREAS OF COOPERATION

• Economic Cooperation

• Defense Cooperation

• Energy Cooperation

• International Cooperation

• Energy and Climate Change

• Counter-terrorism and internal security

• Strategic Cooperation

India-Us Economic Relations

Bilateral trade crossed USD140 billion in FY2025–26 as against of total trade of US$ 132.2 billion in FY2024-25.

While Indian exports grew by just 0.93% (down sharply from 11.6% growth in FY2024–25) to about USD87.3 billion (INR7.7 lakh crore), imports jumped by 17.2% to USD53.5 billion (INR4.7 lakh crore).

US ranks 1st as an export destination and 4th as an import partner for India.

US is the 3rd largest investor in India with cumulative foreign direct investment (FDI) inflows of US$ 77.27 billion from April 2000-September 2025.

Imports from US stood at US$ 35.40 billion in FY26 (till November 2025).

India imported 6,123 commodities from US in FY26 (till November 2025)

Major exports from India to the U.S. include petroleum, polished diamonds, pharmaceuticals, jewelry, light oils, frozen shrimp, and textiles, while major imports from the U.S. comprise petroleum, rough diamonds, liquefied natural gas, gold, coal, waste and scrap, and almonds.

India-Us Defence Cooperation

India-US defence cooperation is based on “New Framework for India-US Defence Cooperation”, which was renewed for ten years in 2015.

In order to improve strategic cooperation, defense industry collaboration, and regional security in the IndoPacific, India and the United States are scheduled to establish a new 10-year defense framework in 2025.

Defence cooperation is multifaceted and includes regular institutionalized bilateral dialogue, military exercises, and defence procurements.

At the apex of dialogue mechanisms is the 2+2 Ministerial Dialogue co-chaired by the Minister of External Affairs and Minister of Defence and the U.S. Secretary of State and Secretary of Defence. This dialogue provides guidance on political, military and strategic issues. The fourth 2 + 2 Ministerial took place in April 2022 in Washington DC.

The Defence Policy Group (DPG) headed by Defence Secretary and Under Secretary of Defence (Policy) provides a platform for a comprehensive review of defense dialogues/mechanisms. The 17th DPG was held in Washington D.C. in May 2023. Defence procurements from USA are growing and amount to almost US$20 billion.

Major US-origin platforms in use include C-130J, C-17, Apache, Chinook, MH60R helicopters and P8I. Other bilateral dialogue mechanisms are the Defence Production and Procurement Group, Joint 5 Technology Group, bilateral Maritime Security Dialogue, Industrial Security Summit and the Defence Trade and Technology Initiative.

Important defence agreements which provide the framework for interaction and cooperation are: Logistics Exchange Memorandum of Agreement (2016); Communications Compatibility and Security Agreement (2018); Industrial Security Agreement (2019); and Basic Exchange and Cooperation Agreement (2020). and Memorandum of Intent for Defense Innovation Cooperation (2018).

The India-US Defence Industrial Cooperation Roadmap which concluded in May 2023, seeks to fast-track technology cooperation and co-production in areas of mutual interest. The India-US Defense Acceleration Ecosystem (INDUS X) – a network of universities, incubators, corporates, think tanks, and private investment stakeholders was launched in June 2023.

Important bilateral exercises include Yudh Abhyas (Army), Vajra Prahar (Special Forces), Malabar (Navy), Cope India (Air Force), and Tiger Triumph (tri-services). Red Flag, RIMPAC, CUTLASS Express, Sea Dragon, and Milan are some multilateral exercises in which the two countries participate.

India joined the multilateral Combined Maritime Force (CMF) based in Bahrain, as an Associate Partner in April 2022.

India as a major defence partner

India has been designated as a major defence partner of the United States. It puts India on a par with the closest allies and partners of the US.

India’s Major Defence Partner status has been made a part of the India Amendment in the National Defence Authorization Act (NDAA), 2017 of US.

Significance: The designation of this status is unique to India, as it is an non-NATO ally of US. It institutionalizes the progress made by US to facilitate defence trade and technology sharing with India to a level at par with its closest allies and partners. It will facilitate US to transfer of advanced defence technology to India. It will also strengthen institutional effectiveness of USIndia Defence Trade and Technology Initiative (DTII) and the durability of the India Rapid Reaction Cell in Pentagon.

Changes in US export law to benefit India

United States (US) has made changes in its export control laws that will benefit India by facilitating smoother transfer of technologies and arms.

These changes have been made in par with recognition of India’s status as a ‘Major Defence Partner’.

The new rule creates a presumption of approval for Indian firms seeking to import the Commerce Department-controlled military items, except weapons of mass destruction-related goods.

Henceforth, companies will not need a license at all after becoming a Validated End User (VEU).

Under it, India will be denied license’s only in the rarest circumstances.

DEFENCE SUPPLIES FROM UNITED STATES

During the Cold War, more than three-fourths of India’s defence equipment was of Soviet origin. This gradually began to change, and in recent years, the US and Israel emerged as major suppliers.

From a total of less than $400 million of defence acquisitions during 1947-2005, the US has signed defence contracts of over $18 billion.

Defence and security ties between India and the US have been on an upswing in the last six years. The bilateral defence trade touched USD 18 billion mark in 2019, reflecting growing defence cooperation between the two sides.

The Indian Air Force went in for C-130J Hercules and the C-17 Globemaster aircraft, along with Apache attack helicopters and Chinook heavy lift helicopters.

The Indian Navy acquired a troop carrier ship and the P-8I long-range maritime reconnaissance aircraft.

During President Donald Trump’s visit, India and the US finalised defence deals under which 30 military helicopters will be procured from two American defence majors for the Indian armed forces.

Under a USD 2.6 billion deal, India will buy 24 MH60 Romeo helicopters from Lockheed Martin for the Indian Navy. Another contract to acquire six AH-

64E Apache helicopters for USD 800 million from aerospace giant Boeing has also been sealed.

The GE F404-IN20 engines for the HAL Tejas Light Combat Aircraft (LCA) Mk 1 and Mk 1A. However, the induction program of LCA Tejas in Indian Airforce faces significant challenges due to delays in GE F404 engine deliveries.