Beyond the Strategic Embrace: The Frictions Washington and Delhi Prefer Not to Advertise

The language surrounding India-US relations in the past decade has grown steadily more elevated, from Manmohan Singh's description of the two countries as natural allies to formal designations such as Major Defence Partner status, granted in 2016, and the Initiative on Critical and Emerging Technology launched in 2023 to deepen cooperation on semiconductors, artificial intelligence and space. Successive American administrations, Democratic and Republican alike, have treated India's rise as a strategic asset in balancing China's regional weight, and successive Indian governments have welcomed the access to advanced defence technology, investment and diplomatic support this framing has unlocked. The relationship's trajectory over two decades, from the aftermath of the 1998 nuclear tests when the United States imposed sanctions on India, to today's joint military exercises and a civil nuclear cooperation agreement, represents one of the more remarkable diplomatic transformations of the post-Cold War era.

That transformation is real, but the language of natural partnership can obscure how much of it rests on a narrow convergence of strategic interest around China rather than a broader alignment of worldview, trade philosophy or even, at times, basic diplomatic courtesy. Understanding the relationship honestly requires looking past the summit photographs at the frictions both governments have generally chosen to manage quietly rather than resolve.

The unfinished trade relationship

Trade has been the most persistently contentious dimension of the bilateral relationship, and it has resisted resolution across multiple administrations on both sides. The United States has repeatedly flagged India's tariff structure, among the highest average applied rates of any major economy according to World Trade Organization data, as an obstacle to deeper commercial integration, while India has resisted pressure to lower duties on products from dairy to medical devices, citing both domestic industry protection and, in dairy's case, cultural and religious sensitivities around animal feed practices that India's negotiators have consistently treated as non-negotiable regardless of which party governs in Delhi. The 2019 removal of India from the US Generalized System of Preferences programme, which had allowed certain Indian exports preferential tariff access, and subsequent retaliatory tariffs India imposed on American agricultural and industrial goods, illustrated how quickly trade friction could surface even during years of otherwise warming strategic ties.

Negotiations toward a limited trade package and, more ambitiously, a broader bilateral trade agreement have proceeded in fits and starts across multiple years, complicated by India's reluctance to accept binding commitments on intellectual property enforcement and digital trade rules that American technology and pharmaceutical firms have pushed for, and by America's own periodic tariff actions, including steel and aluminium duties imposed under successive administrations, that have drawn Indian objections at the World Trade Organization. A comprehensive agreement has repeatedly seemed close and then receded, a pattern that reflects genuine, unresolved differences in development priorities rather than mere negotiating theatre.

Data, technology and the localisation dispute

American technology and financial firms have lobbied consistently against India's data localisation requirements, particularly the Reserve Bank of India's 2018 directive requiring payment system data to be stored exclusively within India, arguing that such mandates raise compliance costs and fragment global data architecture without demonstrable security benefit. India's position, articulated by successive governments, rests on data sovereignty and law enforcement access concerns that echo similar localisation debates in the European Union and China, and reflects a broader Indian policy instinct, visible also in its approach to e-commerce and digital taxation including the equalisation levy that drew explicit American objection and threatened retaliatory tariffs before a negotiated truce, to assert regulatory authority over a digital economy increasingly dominated by American firms.

The visa politics that rarely make joint statements

Few issues generate as much quiet resentment in the Indian professional and business community as the H-1B visa regime, through which the majority of visas in most years go to Indian nationals, chiefly in the technology sector, subjecting hundreds of thousands of skilled Indian workers to an annual lottery system and years-long green card backlogs caused by per-country caps that disproportionately disadvantage applicants from populous countries such as India and China. Periodic tightening of H-1B adjudication standards and fee increases under different American administrations have drawn concern from Indian industry bodies and periodic, though muted, diplomatic representation from Delhi, since raising it too forcefully risks appearing to prioritise a narrow professional-class grievance over the broader strategic relationship, even though the visa question affects a genuinely large and economically significant segment of the Indian diaspora and the Indian technology sector's American-facing business model.

Russia: the fault line neither side wants to force

The most consequential and most carefully managed friction concerns Russia. India has maintained substantial defence procurement relationships with Russia for decades, and its purchase of the S-400 missile defence system, along with continued and in fact expanded purchase of discounted Russian crude oil following the 2022 invasion of Ukraine, has repeatedly tested American patience, including the threat of sanctions under the Countering America's Adversaries Through Sanctions Act, from which India has so far secured waivers or informal exemption rather than a clean legal resolution. American officials have periodically pressed India publicly and privately to reduce this dependence, while Indian officials have defended their position through the language of strategic autonomy, arguing that decades of Soviet and Russian defence supply, including platforms India cannot easily replace or maintain without continued Russian parts and technical support, make an abrupt pivot both militarily risky and diplomatically unnecessary given India's history of non-alignment.

Why the friction has not derailed the relationship

The reason none of these disputes have fundamentally destabilised the broader relationship is that both governments have concluded, independently and for their own reasons, that the strategic value of cooperation against a shared set of concerns regarding China's regional assertiveness outweighs the cost of unresolved friction elsewhere. This is a coldly transactional basis for partnership, more Kissingerian balance of power than genuine alliance of values, and it is worth naming plainly rather than obscuring behind celebratory joint statement language, because transactional partnerships built on converging interest rather than converging worldview tend to be durable exactly as long as the interest converges and can fray quickly once it does not.

A relationship best understood without illusions

None of this argues against the relationship's value, which is real and has delivered concrete benefits to India in defence technology access, investment, and diplomatic weight in multilateral forums, nor does it suggest equivalence between India's frictions with Washington and its more adversarial relationship with Beijing. But treating the India-US relationship as a settled, values-aligned alliance rather than a carefully managed, interest-based partnership with genuine and recurring points of friction risks both overpromising to domestic constituencies in each country and underpreparing for the moments, whether over trade retaliation, visa policy, or a future crisis involving Russia or a third country, when the underlying differences resurface with less diplomatic cushioning than they have enjoyed so far.