USA Pressure on India and the Need for Strategic Independence

American Pressure on India and the Need for Strategic Independence

CA. S. Muralidharan
Business Mentor and Thought Leader

India has repeatedly discovered that a strategic partnership with the United States offers no automatic protection against economic pressure, disregard for its security concerns or treatment that offends the dignity of its citizens. These experiences deserve to be placed at the centre of the discussion. They explain why India needs the strength to sustain an independent decision when a powerful partner finds that decision inconvenient.

The concern is rooted in identifiable actions: pressure that ended Iranian oil purchases, withdrawal of trade preferences, a public maritime challenge, support for Pakistan’s fighter fleet, warnings over India’s Russian defence purchases, penalties linked to Russian oil, and disruption affecting Indian migrants and professionals. Their legal bases and severity differ. Together, they expose the risks of relying on goodwill when bargaining power is unequal.

These episodes do not establish a single, continuous American plan to keep India subordinate. They do establish that Washington can place its own commercial, strategic and domestic political priorities above Indian interests, even during a period of close cooperation. India must respond by building the economic and technological foundations that make such pressure less effective.

When American decisions imposed costs on India

The strongest case for greater Indian resilience begins with the record of unfavourable treatment. The issue is not whether the United States is entitled to pursue its interests. It is whether India has enough strength and enough alternatives to protect its own when those interests collide. The following episodes show why that question is practical and urgent.

Iranian oil and the limits of independent energy choices

In 2018–19, the restoration of American sanctions against Iran placed India under pressure over purchases from a longstanding energy partner. When Washington ended oil-import exemptions in May 2019, India stopped those purchases and arranged alternative supplies. India’s requirements had not disappeared; the sanctions environment had changed. Its energy choices were consequently narrowed by another government’s foreign-policy decision. [1]

The restrictions affected other countries too. Nevertheless, from India’s perspective, an important lesson was that an independent relationship with a third country could become costly to maintain because of American financial and sanctions power. India had to adjust to a policy it had not chosen.

That experience makes energy diversification, emergency stocks and lower oil exposure central to strategic independence. A protest cannot replace a viable alternative supply arrangement.

Trade preferences withdrawn despite the strategic partnership

The United States terminated India’s Generalized System of Preferences benefits from 5 June 2019, after concluding that India had not provided the market access Washington required. India stated that it had offered solutions to significant American requests. Preferences covering approximately $6.3 billion of Indian exports in 2018 were withdrawn; this figure describes covered exports, not the tariff saving lost. [2] [16]

GSP was a conditional American programme, so its withdrawal was not a breach of a guarantee of permanent access. The political lesson remains important: the expanding strategic relationship did not protect Indian exporters when commercial negotiations became difficult. American market access could be used to press for changes in Indian policy.

India imposed additional duties on 28 American products that month. Those duties had originally been planned in response to American steel and aluminium tariffs, rather than solely to the GSP decision. Their eventual negotiation demonstrated the need for both bargaining instruments and diversified export markets. [2]

A public challenge near Lakshadweep

On 7 April 2021, the USS John Paul Jones conducted a freedom-of-navigation operation in India’s exclusive economic zone near Lakshadweep. The American statement publicly challenged India’s position on consent for military activities. India monitored the vessel and conveyed its concerns. [3]

An exclusive economic zone is not territorial waters, and the two governments differed over maritime law. The event should therefore be described accurately. Yet its diplomatic significance was clear: the United States was prepared to publicly contest India’s position even while seeking closer Indo-Pacific cooperation.

For India, the episode underlined that cooperation does not ensure deference to its interpretation of its rights. Maritime surveillance, credible naval capability and sustained legal diplomacy must support India’s position.

Pakistan F16 support despite Indian security concerns

In September 2022, Washington approved a potential $450 million sale to sustain Pakistan’s F-16 fleet. This was maintenance and support for existing aircraft, rather than a sale of new fighters or new weapons. But sustaining an existing capability can still have consequences for the country that may face it. [4]

Defence Minister Rajnath Singh conveyed India’s concerns to US Defence Secretary Lloyd Austin. The Indian government’s objection is recorded in its own official account of their conversation. Washington nevertheless maintained its separate policy towards Pakistan. [17]

India could reasonably see a mismatch between being courted as an important security partner and having its concerns about Pakistan insufficiently accommodated. The lesson is that India must retain an independent military assessment and procurement strategy. Another government’s relationship with Pakistan will continue to reflect its own calculations.

Warnings over the S400 and pressure on defence procurement

India’s decision to acquire Russia’s S-400 air-defence system drew American warnings about sanctions. India signed the agreement in 2018 and proceeded with deliveries beginning in 2021 despite that risk. [7]

This was a significant test of autonomy. India faced the prospect of an American penalty for a defence purchase it considered necessary for its security. Washington’s wider policy towards Russian military equipment thus threatened to affect India’s freedom to choose its supplier.

India’s decision to proceed demonstrated resistance. It also exposed a continuing vulnerability: reliance on imported strategic systems leaves a country navigating pressures from suppliers and rival powers. Domestic engineering, maintenance, spares and upgrade capability would give India a stronger position over time.

Russian oil tariffs and direct economic coercion

The August 2025 Russian-oil tariff decision was the clearest example of pressure linking an Indian foreign-policy choice to economic punishment. The United States announced an additional 25 per cent duty on covered Indian goods because India was importing Russian oil. Together with the other announced tariff, the rate reached 50 per cent for many products, subject to exclusions. These are the measures announced at that time, rather than a statement of the current tariff schedule. [5]

Indian exporters and their workers were placed at risk over an energy decision made in the context of India’s own requirements. India called the action “unfair, unjustified and unreasonable” and challenged the selective criticism of its Russian trade while Western trade with Russia continued. That response records India’s position; the mix and legal treatment of different countries’ transactions should not be assumed identical. [18]

The important point is the explicit use of export-market access to influence India’s external choices. This episode gives the article its most direct warning: if essential export earnings depend too heavily on one market, a disagreement over foreign policy can become a threat to domestic livelihoods.

India’s answer must therefore extend beyond rebuttal. It needs more export destinations, competitive firms and support for workers and businesses during sudden disruption. Negotiation becomes more credible when the economy has alternatives.

Indian professionals and the insecurity of conditional access

The September 2025 requirement for a $100,000 payment for certain new H-1B petitions demonstrated how abruptly the conditions for access to the American labour market could change. The White House clarified that it was a one-time payment connected with new petitions, with limitations and exceptions. It was not an annual charge on every existing visa holder. [6]

For Indian professionals, families and firms, the concern was nevertheless substantial. An economy may benefit from Indian talent while its political institutions make future entry much harder. The interests of employers and the priorities of an administration can diverge, producing disruption for the people caught between them.

This does not prove a coordinated policy of using and discarding Indians. It does show why India should build more attractive opportunities at home, widen professional mobility arrangements with other countries and seek predictable treatment for its nationals abroad.

The treatment of deportees and the question of dignity

The arrival of a US military aircraft carrying 104 Indian deportees on 5 February 2025, and reports of shackling, generated a different concern: the dignity of Indian citizens. The Indian government subsequently told Parliament that it had strongly raised its concerns with American authorities about treatment on that flight, particularly the use of shackles, especially on women. [19]

The right to remove a person under immigration law does not settle the question of how that person should be treated. American procedures allowing restraints predated the flight, and similar concerns were not unique to India. Those facts provide context without removing the legitimacy of India’s demand for humane treatment.

India should continue accepting the return of verified nationals where required while seeking effective consular access, clear safeguards and humane procedures. Stronger domestic opportunities can reduce the desperation exploited by migration agents, but dignity abroad should not depend on a person’s income or immigration success.

What these episodes mean for India

The pattern is not that every American policy is hostile, or that cooperation has no value. It is that partnership has repeatedly failed to shield India from pressure, decisions adverse to its security preferences and treatment that its government has had to contest. Warm statements and personal rapport have not removed those vulnerabilities.

These incidents concern different mechanisms: sanctions power, market access, military policy, legal disagreement, immigration controls and the treatment of individuals. Their common lesson is that India needs greater capacity to protect its interests when cooperation becomes conditional.

The response should be to make pressure harder to apply and easier to withstand. Energy resilience answers the oil episodes. Export diversification answers tariff threats. Domestic defence capability answers procurement pressure. Research and technology ownership reduce dependence on permissions and foreign supplies. Better opportunities at home and stronger consular arrangements address different aspects of migration vulnerability. The priorities that follow arise directly from these experiences.

How India has responded

India has usually combined resistance, negotiation and selective accommodation. It accepted the practical constraints on Iranian oil purchases, retaliated in trade and later negotiated settlements, and protested over maritime issues and Pakistan’s aircraft support. In 2023, India and the United States agreed to resolve six WTO disputes, alongside removal of specified Indian retaliatory tariffs. That was a negotiated settlement rather than a complete victory for either side. [2]

There have also been consequential demonstrations of independence. India proceeded with the Russian S-400 air-defence acquisition despite American warnings about possible sanctions. Deliveries began in 2021. Here, the government sustained a security decision rather than limiting its response to public disagreement. [7]

At the same time, India continued seeking American investment and advanced technology cooperation. The 2023 GE–HAL engine proposal showed why engagement remained valuable, although a proposal or agreement cannot be equated with completed technology absorption. India’s challenge is to extract lasting capability from cooperation while preserving alternatives. [8]

The results are mixed. Firm language has not always changed American policy. Yet dramatic retaliation is not automatically effective either. A response that damages Indian workers and firms more than its intended target may reduce the very independence it seeks to demonstrate.

The capability India has begun to build

India has expanded the instruments needed for greater resilience. Defence procurement preferences and indigenisation programmes seek to develop local suppliers. For 2025–26, 75 per cent of the defence modernisation procurement budget was earmarked for domestic industry. This creates demand, but buying from an Indian company does not establish that every critical technology is Indian-controlled. [9]

Electronics production increased from roughly ₹1.9 lakh crore in 2014–15 to ₹11.3 lakh crore in 2024–25, in nominal terms. Semiconductor and component programmes seek to deepen this base. Production growth is important, but gross output does not measure domestic value addition or technological ownership. A factory may operate in India while depending on imported machinery, designs and components. [10]

UPI demonstrates India’s ability to develop and govern digital infrastructure at scale. The IndiaAI Mission seeks to widen access to computing and support domestic innovation. These are valuable foundations. Access to advanced computing, however, is different from control over the chips, equipment and software used to provide it. [11]

Energy presents an especially clear mixed picture. India reached 50 per cent of installed electricity capacity from non-fossil sources in June 2025. That does not mean half of electricity generation came from those sources. Meanwhile, RBI analysis recorded crude-oil import dependence rising from 77.6 per cent in 2013–14 to 88.2 per cent in 2024–25. Electricity-sector progress has therefore not removed oil vulnerability. [12]

The strategy India now needs

India’s future strategy should make coercion harder to apply and less damaging when it occurs. A country becomes vulnerable when another government believes that threatening its exports, technology supplies or access to finance will secure compliance at little cost. India must change that calculation through credible alternatives and capabilities it can sustain.

The aim should be a relationship with the United States in which both sides recognise the value of cooperation and the costs of damaging it. India should state its interests clearly, negotiate firmly and prepare practical responses before the next dispute. Personal rapport between leaders can help, but businesses and national institutions need arrangements that survive changes of administration.

This requires a clear order of priorities. Immediate vulnerabilities must receive attention first. Industrial and technological depth should follow through patient investment. The strategy must also create productive jobs and stronger household incomes, because citizens ultimately bear the cost of prolonged confrontation. The following priorities are proposed actions, rather than a list of government commitments.

First identify and reduce critical dependencies

The first priority is a national assessment of dependencies that could interrupt essential activity. Relevant ministries should work with industry to identify vulnerable defence components, pharmaceutical inputs, semiconductor equipment, industrial software, critical minerals, energy supplies and communications systems. For each dependency, India should establish supplier concentration, available substitutes, emergency stocks and the time required to qualify another source.

The response should differ by product. Some capabilities warrant domestic development even at an initial premium. Others can be secured more economically through suppliers in several countries, long-term contracts or emergency inventories. Limited public money should go first to vulnerabilities whose disruption would create the greatest damage.

Cabinet-level review should assign a responsible ministry and dated milestones to each major vulnerability. Broad progress should be reported publicly while operationally sensitive details remain confidential. The test is whether exposure actually declines, rather than whether another committee or mission has been announced.

Second build technological ownership and manufacturing depth

Manufacturing support should increasingly reward verified domestic value addition, engineering and supplier development. Production growth remains useful, but an Indian factory can still depend on a foreign design, imported machinery and a single overseas source of critical components. The next stage must strengthen what Indian engineers and firms can control.

Major strategic contracts should specify maintenance rights, access to technical information, modification rights and the scope for developing Indian suppliers. Technology-transfer claims should identify exactly what has been acquired. Where commercially feasible, India should seek the ability to repair, upgrade and reproduce critical components without requiring fresh foreign permission.

Foreign investment should support joint engineering centres, apprenticeships and supplier training. Domestic firms should invest their own capital alongside public assistance. Support should have performance milestones and expiry dates, while competitive imported inputs remain available to exporters. Forcing immediate localisation of every item can increase costs and weaken the businesses that India needs to grow.

Third turn research into commercial capability

The ₹1 lakh crore Research, Development and Innovation scheme provides a financing instrument intended to encourage private-sector research. Its success will depend on deployment and outcomes, rather than the announced corpus alone. Universities, laboratories and firms need dependable multi-year funding, usable intellectual-property agreements, testing facilities and support for prototypes. [13]

Government should select a limited set of strategically important technology problems and fund competing teams against clear technical milestones. Independent experts should review progress. Honest research failure must be distinguished from poor execution, and promising work must survive changes in administrative leadership.

Commercial success requires customers. Defence services, railways, hospitals and utilities should offer paid trials, independent testing and a defined route to procurement when products meet the required standard. Prompt payment and predictable orders can help a capable startup become a durable supplier. Patents and demonstrations should be followed by products deployed, repeat orders, licensing income or export sales.

Fourth make Indian firms competitive across several markets

India should make it easier for firms to grow through dependable electricity, efficient logistics, predictable regulation, timely tax refunds, enforceable contracts and affordable working capital. These improvements strengthen every export industry. The World Bank similarly emphasises lower trade costs and deeper participation in global value chains. [14]

Trade agreements should be followed by practical programmes for certification, distribution, export credit and after-sales support. The Commerce Ministry and industry associations should track sustained sales across markets, especially for firms heavily exposed to one country. Diversification requires commercially viable customers, rather than simply redirecting shipments after a crisis.

Fifth strengthen energy and financial resilience

India should diversify energy suppliers and shipping routes, expand usable emergency reserves and rehearse prolonged disruption scenarios. The IEA’s recommendations on emergency stocks and response procedures remain relevant. Storage should be assessed by accessible supply during a crisis, with clear authority over release and replenishment. [15]

Oil exposure must also be reduced through measures that are economically sound: electric buses and two-wheelers, better public transport, rail freight and industrial efficiency. Renewable electricity requires stronger grids and storage. Energy security should consider the imported minerals and equipment needed for new technologies as well as the fuels they replace.

Financial preparedness should include stress tests for trade finance, external debt and firms exposed to sanctions-related disruptions. Government, the RBI and banks should develop lawful contingency arrangements and communicate risks clearly. Local-currency settlement can be expanded where counterparties find it useful, but its value should be judged by actual trade facilitated and costs reduced. It cannot by itself remove exposure to global finance.

Sixth negotiate firmly and respond proportionately

India should decide in advance which interests it considers essential, which issues are negotiable and what concessions it would require in return for its own. Negotiators need a clear mandate across ministries so that commercial, security and immigration discussions support a coherent national position.

When pressure is applied, the government should assess the available response: formal protest, dispute settlement where applicable, targeted commercial measures, alternative procurement or negotiated adjustment. Each option should be judged by its likely effect on the other side and its cost to Indian citizens. A forceful response is useful when it improves India’s position; retaliation that mainly injures Indian firms can undermine it.

India should also work with countries affected by similar restrictions and maintain relationships across American institutions, business, universities and society. In immigration matters, it should seek predictable procedures, humane treatment and effective consular access while recognising the distinct legal positions of citizens, lawful migrants and people facing removal.

The government should explain significant settlements honestly. Citizens should be able to distinguish a concession obtained, a compromise accepted and a demand that remains unresolved. Public confidence is stronger when diplomatic language is supported by measurable results.

Seventh make resilience broad enough to last

Strategic strength needs productive employment, technical education, health and financially resilient households. Export restrictions and fuel shocks eventually affect workers, small-business cash flow and family budgets. Prosperity concentrated in a narrow segment cannot provide the same resilience as rising productivity and incomes across society.

Union and state governments should strengthen apprenticeships, women’s employment and industrial clusters outside the largest cities. Large firms should develop domestic suppliers and invest in workforce skills. MSMEs need reliable payments and access to technology so that they can participate in stronger supply chains.

This is also a responsibility of business leadership. Indian companies must invest in research, quality, professional management and overseas market development. Government assistance should help firms become competitive, with clear expectations that they commit capital, improve performance and eventually operate without continuing support.

A timetable that makes the strategy accountable

During the next two years, India should complete the critical-dependency assessment, assign responsibility for the most serious gaps, improve procurement and payments, and test emergency arrangements. Existing funds and schemes should be reviewed for delivery before new programmes are added.

Over three to five years, the emphasis should be on qualified alternative suppliers, commercially successful Indian products, deeper component manufacturing and sustained exports to more markets. Advanced engines and semiconductor equipment require longer horizons, stable institutions and continued technical review. Deadlines should be ambitious but grounded in engineering realities.

An annual scorecard should measure supplier concentration, time needed to replace critical imports, domestic value addition, independent repair and upgrade capability, commercial research outcomes, export diversification and energy readiness. It should also track productive jobs and real earnings. These measures connect national strategy with the conditions that allow citizens and firms to endure pressure.

The ability to sustain an independent decision

India should regularly conduct a demanding national exercise: if a major partner restricted supplies, finance or market access for six months, which essential activities would continue, which would stop, and what would the disruption cost? The findings should guide investment and be tested again after corrective action.

No government can prevent every unfavourable foreign decision. It can build the capacity to absorb the consequences, negotiate alternatives and protect its citizens. Diplomatic independence becomes credible when essential systems keep functioning and businesses can adapt.

India should pursue cooperation with the United States from that foundation. A productive partnership will remain valuable to both countries. Its durability will improve when India has sufficient technological, economic and institutional strength to disagree without facing an intolerable cost. That is the unfinished national task, and it requires consistent work well beyond the immediate dispute.

Sources and scope

Prepared 23 October 2026. Historical examples retain their dates. Figures are selected published benchmarks rather than a complete current statistical series. Interpretations and proposed actions are the author’s assessment.

[1] Government of India statement on Iranian oil exemptions 23 April 2019
https://www.pib.gov.in/newsite/PrintRelease.aspx?lang=2&reg=48&relid=189833

[2] USTR 2024 National Trade Estimate and June 2023 dispute settlement announcement
https://ustr.gov/sites/default/files/2024%20NTE%20Report.pdf

[3] MEA passage of USS John Paul Jones 9 April 2021
https://www.mea.gov.in/press-releases.htm?dtl/33787/Passage_of_USS_John_Paul_Jones_through_Indias_EEZ

[4] US notification of proposed Pakistan F16 sustainment sale September 2022
https://media.defense.gov/2024/Dec/11/2003606312/-1/-1/0/PRESS%20RELEASE%20-%20PAKISTAN%2022-07%20CN.PDF

[5] US executive order on Russian oil and Indian tariffs 6 August 2025
https://www.whitehouse.gov/presidential-actions/2025/08/addressing-threats-to-the-united-states-by-the-government-of-the-russian-federation/

[6] White House H1B clarification September 2025 and MEA parliamentary answer August 2025
https://www.whitehouse.gov/releases/2025/09/h-1b-faq/

[7] Reuters Russian S400 deliveries begin 14 November 2021
https://www.reuters.com/world/india/russia-starts-missile-supplies-india-despite-us-sanctions-risk-2021-11-14/

[8] India US joint statement September 2023
https://www.pmindia.gov.in/en/news_updates/joint-statement-from-india-and-the-united-states/

[9] Government of India defence procurement facts June 2025
https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/jun/doc2025610567901.pdf

[10] Government of India electronics manufacturing and components March 2026
https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=157614

[11] Government of India IndiaAI Mission October 2025
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2178092

[12] RBI analysis of crude oil import dependence and government non fossil capacity milestone
https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=23516

[13] Department of Science and Technology RDI scheme
https://dst.gov.in/rdi-scheme/research-development-and-innovation-rdi-cell

[14] World Bank India country overview and economic memorandum
https://www.worldbank.org/ext/en/country/india

[15] IEA India energy policy recommendations
https://www.iea.org/countries/india

[16] Government of India impact of GSP withdrawal June 2019
https://www.pib.gov.in/Pressreleaseshare.aspx?PRID=1575195

[17] Ministry of Defence conversation with US Defence Secretary 14 September 2022
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1859301

[18] Indian response to Russian oil tariffs August 2025
https://indianexpress.com/article/india/unfair-unreasonable-india-trump-doubles-tariff-to-50-10174110/

[19] Lok Sabha record on treatment of deportees 21 March 2025
https://sansad.in/getFile/debatestextmk/18/IV/21.03.2025.pdf?source=loksabhadocs